Real estate behemoth Zillow is suing three regional MLSs over an alleged effort to steer their members away from using the company’s ShowingTime software and toward a competing product owned by the MLSs, which the company claims violated federal antitrust statutes.
Filed at the end of December in the U.S. Federal District Court for Arizona, Zillow’s complaint names two Arizona-based companies and one Wisconsin-based company, which Zillow claims worked together with “expressly anticompetitive” aims and practices to undermine Zillow’s showing service in favor of their own, eventually deintegrating the platform on December 27.
“Defendants are seeking to gain monopoly power in the relevant geographic markets for showing management platforms,” the complaint reads. “There is a dangerous probability that they will succeed because MLS Defendants’ monopoly power over the MLS Services and their control over the member portals through which those services are accessed gives them the ability to degrade competing offerings and steer customers.”
While the lawsuit amounts to a relatively narrow dispute over software and business practices, the implication is that many or most MLSs could easily engage in the same behavior. Zillow’s arguments also mirror many of the same allegations put forward by plaintiffs in various class action suits filed over the last few years.
Citing a 2007 FTC report (which was also referenced by plaintiffs in several of the class action suits), Zillow argued that MLS access is effectively necessary to operate as a real estate agent.
“Each MLS has a monopoly over MLS Services, and controls the MLS member portal used to access those services, in its coverage area,” the lawsuit states.
While class action lawsuits have leveraged this argument to claim that consumers are harmed, Zillow applies roughly the same logic to third-party vendors, claiming there is no “reasonable substitute” for the MLS and that MLSs can use their market power to essentially kill or elevate products like showing services.
“The practical effect of a showing management platform not being integrated into the MLS member portal is that the platform is functionally unworkable for most agents,” the lawsuit claims.
In response to an emailed inquiry from RISMedia, a Zillow spokesperson referred to an open letter penned by Zillow Chief Industry Development Officer Errol Samuelson, which argued Zillow’s actions are about agent choice, and noting that other MLSs offer multiple options for showing services.
The MLSs, which include Metro MLS based in Milwaukee, Wisconsin, and Arizona Regional MLS based in Phoenix, Arizona, could not immediately be reached for comment.
In the lawsuit, Zillow claimed the behavior by the MLSs went further than aggressive competition. When, after the MLSs chose to sunset the ShowingTime service, Zillow offered to provide some of the product for free, the MLSs declined.
“There is no rational economic reason to reject the provision of valuable services at no cost, except for the existence of a conspiracy,” Zillow wrote.
But the filing also cites a representative of one of the MLSs, who allegedly said in a training that the choice to switch platforms was because Zillow is a “competing brokerage” and it “didn’t really sit well” to continue using ShowingTime.
This right here is the reason! “Zillow is a “competing brokerage” and it “didn’t really sit well” to continue using ShowingTime.”
Zillow collects the data i.e. contact info that our agents input about our clients to use the service which is not something that I care to share with a competing brokerage.
If each mls can make decisions on their own as to who they select for vendors, I would imagine that the end result should not considered abuse of power.
While software such as showing time is certainly convenient for agents re ease of scheduling, making the showing request time blocks available for a buyers agent may not be serving sellers well. If the calendar for showing requests shows few showing requests have been made, this may not serve the sellers best interest to show the schedule of scant interest in their property.
Zillow accusing others of anti-competitive. That’s rich.
Correct, this quote really got me “There is no rational economic reason to reject the provision of valuable services at no cost, except for the existence of a conspiracy,” Zillow is the biggest anti competition player out here.
Zillow The Parasite has the audacity to accuse someone of monopolizing !!??!!
You’re kidding right?? Actually I’m not surprised.
If Zillow could replace every MLS system and become the only MLS system, they would do it in a nanosecond!!! … and we all know it !!
I can live without showing time. No big deal.
And you know that is where they are heading… They want to be the replacement for all of the MLS’s
These third-party intruders who bring little or no value to the real estate transaction are in it for one thing: The Money! Rascoff, (co-founder of Hotwire) & Humphries, (analytics guy at Expedia), enter into real estate with little or no knowledge of the industry. They saw $$ signs. In their 2015 book Zillow Talk they mocked the home valuation process conducted by a licensed appraiser, saying that “pencils, measuring tapes & Polaroid cameras” would be replaced with an instant valuation through their Zestimate algorithm. Here we are in 2024 & most of us in RE know just how poor that system works. Further, they lost millions of $$ with their home-buying division as their algorithm system failed. We know we can do better for our clients and customers because we are the industry.
Z has a long standing history of making claims then going against them. Case in point: When they became a brokerage after stating endlessly for years they had no interest in going into competition with the agents who paid them for leads, etc. Flat out lies.
Posing the question then and no, this isn’t tinfoil hattery because metadata is a commodity traded heavily in our modern world: What is to keep Z from throwing the switch and taking the data they receive from ShowingTime or DotLoop and plowing it into their algorithms, competing against us to take our clients– Good intentions? A promise from a company notorious for breaking them?
ShowingTime knows everything about a listing that is otherwise confidential between the client and brokers/agents: Showing activity/requests, feedback, seller contact info and for the agents that are using it for offer submission, all the terms of the offers whether accepted or not. That is ripe for data integrity and privacy issues.
Colleagues: Anything Z is tied to shouldn’t be part of any licensed agent’s business model. Stop paying them for leads, stop using DotLoop, and push your MLS to abandon ShowingTime.