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Judge Dismisses Antitrust Suit Against Zillow

 |  March 4, 2020

A federal judge this week dismissed a two-year-old antitrust lawsuit against Zillow Group and its Zestimate home valuation tool.

In 2018, a New Jersey group called EJ MGT sued Zillow, alleging that a policy allowing some partners to move the Zestimate valuation tool lower down on listings hurts competition and amounts to a violation of US antitrust laws.

The conflict arose when Zillow’s Zestimate for a home in New Jersey came in well below what EJ MGT wanted to sell it for. EJ MGT alleged that several buyers were dissuaded from purchasing the home due to the discrepancy.

Typically, the Zestimate is one of the most prominent aspects of a listing, appearing just below the list price. By allowing what EJ MGT called “co-conspirators” — brokers that partner with Zillow — to “conceal” Zestimates, Zillow undermined the transparency the tool was meant to create, the suit alleged.

In an opinion issued Tuesday, March 3, Judge John Michael Vasquez wrote that the prominence of a Zestimate on its listing or that of a competing broker didn’t hurt EJ MGT’s efforts to sell the house. From the ruling “Rather, it appears from Plaintiffs allegations that its injury is instead casually connected to the discrepancy in value between the Property’s asking price and the Property’s Zestimate. Presumably, if the Zestimate for the Property was higher than Plaintiffs asking price, then Plaintiff would not be claiming any injury — which leads to the conclusion that it is the amount of the Zestimate, rather than its location, which causes Plaintiffs alleged injury.”

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