Background
on
the
lawsuit

Compass
filed

the
lawsuit
over
Zillow’s
policy,
which
bans
listings
that
have
been
publicly
marketed
for
more
than
one
business
day
prior
to
them
being
available
for
display
on
Zillow,
in
mid-June.
They
then
filed
its
motion
for

preliminary
injunction
just
days
before
the
policy
was
set
to
take
effect. 

During
the

final
day
of
testimony
at
the
hearing,
both
parties
addressed
the
antitrust
claims,
with
Compass’s
legal
counsel
claiming
that
the
ongoing
communication
between
leaders
at
Zillow
and

Redfin,
which
announced
but
never
enacted
a
nearly
identical
policy,
was
evidence
of
collusion,
that
the
policy
harms
both
Compass
and
industry
competition,
and
that
strategy
documents
presented
as
evidence
illustrate
Zillow’s

monopoly
power.

In
contrast,
Zillow’s
attorney
claimed
that
there
was
no
evidence
of
collusion
between
itself
and
Redfin,
and
that
Zillow
has

no
duty
to
deal
with
Compass
and
strong
“pro-competitive
justifications”
for
the
policy.

What
the
attorneys
say

Under
antitrust
law,
if
a
policy
is
found
to
harm
competition,
it
can
be
allowed
if
there
is
evidence
that
the
policy
actually
benefits
the
consumer
and
that
there
are
no
other
less
anti-competitive
ways
to
achieve
the
same
results. 

“If
the
defendants
are
able
to
show
some
pro-consumer
benefits
that
outweigh
the
anti-competitive
nature,
and
of
course
there
are
exceptions,
but
the
majority
of
the
cases
where
this
happens,
the
defendants
win,”
Bradley
Weber,
the
co-chair
of

Locke
Lord’s
antitrust
practice
group,
said. 

For
Harrison
McAvoy,
a
partner
at

Shinder
Cantor
Lerner
LLP
who
specializes
in
antitrust
law,
Zillow
did
not
present
any
strong
pro-consumer
justifications
for
the
policy
at
the
hearing. 

“Compass
offered
evidence
of
an
effect
on
Compass
and
an
effect
on
competition
generally,
as
well
as
harm
to
consumer
choice,
related
to
seller’s
having
a
say
in
how
their
home
should
be
marketed,”
McAvoy
said.
“It’s
not
clear
that Zillow
has rebutted in
any
way the
notion
that
the
policy
stops
sellers
from
choosing
how
their
home
should
be
marketed.” 

In
McAvoy’s
view,
Zillow’s
main
argument
is
that
the
policy
benefits
both
buyers
and
sellers,
but
he
finds
it
questionable
that
sellers
would
benefit
from
having
fewer
choices
in
marketing
their
homes.

“It
seems
that
Zillow
would
need
to
show
that
agents
are
affirmatively
harming
their
clients
by
marketing
homes
publicly
but
not
on
Zillow
even
if
that’s
only
for
a
short
period
of
time,”
he
said. 

He
added
that
based
on
the
evidence
presented,
it
remains
unclear
how
buyers
are
harmed
by
having
to
look
somewhere
other
than
Zillow
to
find
listings.
Moving
forward,
for
Zillow
to
present
a
better
argument,
he
said
the
defendant
will
need
to
explain
exactly
how
the
policy
benefits
buyers
and
sellers
and
prove
that
those
benefits
overcome
the
harm
to
seller
choice. 

In
contrast,
Weber
feels
that
Zillow
presented
a
strong
case,
as
he
feels
the
crux
of
Compass’s
claim
is
that
Zillow
has
a
duty
to
deal
with
Compass
on
its
terms,
which
he
said
is
a
very
challenging
type
of
claim
to
prove
in
an
antitrust
case. 

Differing
opinions

As
no
one
company
has
a
duty
to
deal
with
another,
in
order
to
prevail,
Weber
said
Compass
would
have
to
show
that
Zillow
had
a
pre-existing
voluntary
and
presumably
profitable
course
of
dealing
with
Compass.

“This
would
be
that
Zillow
is
dealing
with
Compass,
in
terms
of
allowing
Compass
to
list
properties
on
the
Zillow
platform,
and
that
by
terminating
it,
it
showed
a
willingness
to
forsake
short-term
profits
to
achieve
an
anti-competitive
end,”
Weber
said.
“Compass
didn’t
even
really
try
to
argue
that
in
my
opinion,
and
I
haven’t
seen
any
information
on
the
policy
reducing
Zillow
profits
or
that
it
had
some
anti-competitive
motive.” 

In
Weber’s
mind,
Zillow
presented
a
compelling
case
that
the
rule
was
designed
to
create
more
transparency
by
ensuring
that
consumers
can
see
all
available
inventory. 

“To
me,
it
makes
sense
that
it
would
benefit
consumers
to
have
a
one-stop
shop
where
they
could
look
at
all
the
listings
instead
of
having
to
go
to
each
brokerage’s
site
to
see
them,”
Weber
said.

Ruling
on
the
injunction
motion

While
Weber
and
McAvoy
disagree
on
which
party
made
a
better
case,
they
do
agree
that
whichever
way
the
judge
rules
on
the
preliminary
injunction
motion
will
provide
some
insight
into
which
way
the
judge
is
leaning
in
the
overall
case,
based
on
the
evidence
presented
thus
far. 

However,
Weber
noted
that
less
can
be
read
into
the
motion
being
denied,
as
that
could
simply
just
mean
that
Compass
was
unable
to
meet
the
burden
of
showing
that
it
is
likely
to
prevail
at
trial.

“But
I
do
think
that
if
the
court
denies
the
injunction
that
would
tend
to
indicate
that
the
court
is
agreeing
with
Zillow’s
position,”
Weber
said. 

Regardless
of
the
outcome,
he
said
he
will
closely
be
watching
for
the
judge’s
opinion
as
he
feels
the
wording
will
provide
valuable
insight
into
how
the
court
views
the
case. 

As
of
early
December,
it
remains
unknown
as
to
when
the
court
will
issue
a
ruling
on
the
motion.
The
parties
have
until
Friday
to
file
any
further
post-hearing
papers
setting
out
findings
of
fact
and
conclusions
of
law.