A judge also denied REX’s request for a preliminary injunction against NAR and Zillow. REX requested the precautionary measure after arguing that it was a victim of anti-competitive practices.
Zillow and the National Association of Realtors (NAR) scored a victory in their legal fight with discount brokerage REX On Wednesday, when a judge said that REX had failed to prove that he was irreparably harmed by what it called a real estate “cartel.”
The judge also told REX to stop referring to Zillow, NAR, and others as a “cartel.”
The case first erupted in March. At that time, REX – What did you say wants to “drastically reduce commissions” and aims to operate outside of the traditional multi-list service (MLS) system, said in a court document that “legacy cartel members” had “banded together to boycott a fledgling competitor.”
There are a number of claims in the case, including some related to agent commissions. But the gist is that REX accused members of the real estate establishment of anti-competitive practices that segregated and marginalized REX listings.
Zillow was dragged into the case thanks to a backend change in the way you get your data and in a move to put more emphasis on agent rosters. REX disagreed with these changes, saying they resulted in discount brokerage listings “losing significant traffic” and being relegated to less space on the website, based on their lawsuit.
Zillow responded to the suit in April, arguing that REX’s claims were “unsubstantiated.”
REX’s goal when it filed the lawsuit was to obtain a preliminary injunction. That basically means he wanted court-ordered rules limiting what NAR and Zillow could do with the listings. Among other things, REX wanted the court to prohibit NAR, Zillow and their partners from engaging in “any anti-competitive conduct” and to segregate or exclude REX’s listings.
But in Wednesday’s ruling, the judge sided with Zillow and NAR.
Among other things, the judge concluded that REX had not shown “a probability of irreparable harm”, nor had it proven that the practices of Zillow, NAR and their partners threaten REX’s existence.
“Plaintiff claims that it is a market ‘disruptor’ within the real estate industry, but has not shown, for example, that it has engaged in extensive marketing efforts to carefully monitor its brand image as unaffiliated with NAR or MLS “. Ruling states on Wednesday.
The judge also argues in the ruling that REX has not shown that it is likely to prevail in its arguments that Zillow, NAR and others violated antitrust and consumer protection regulations.
In addition to exploring the main arguments in the case, Wednesday’s ruling is also peppered with footnotes, many of which add context and comments. The seventh footnote directly addresses the use of the word “cartel” and orders REX to move away from that language.
“The Court discourages any future use of the term ‘cartel’ to describe Defendants’ conduct,” says the footnote, “which is neither convincing nor remotely accurate.”
After reaching out to REX Wednesday afternoon for comment, the company directed Inman to a statement in which CEO Jack Ryan said: “We are disappointed that consumers continue to face the NAR segregation rule every time they visit Zillow. “. Ryan also said that REX “will not stop” pursuing the case, which “is far from over.”
“REX will continue to innovate for consumers as it builds its case against old industry rules that stifle consumer choice and competition,” Ryan continued in the statement. “At a time when home prices are skyrocketing and the supply of homes for sale is at record lows, consumers deserve to see every home on the market.”
On the other hand, Zillow expressed satisfaction, and a spokesperson said in a statement to Inman on Wednesday: “We have consistently maintained that the REX allegations are unfounded.”
“We are pleased with the court’s decision denying REX’s motion for a preliminary injunction,” the statement added, “and its recognition of our commitment to empowering consumers with the most complete and up-to-date housing and listing information possible.” .
Read Wednesday’s ruling here:
Correction: Zillow filed a response to REX’s lawsuit in April. This post initially and incorrectly referred to that submission as a counterclaim.
Email Jim Dalrymple II