Zillow, the leading home-listing platform, is facing off against Real Estate Exchange (REX) at the U.S. District Court in Seattle this month in a lawsuit accusing the online marketplace of driving REX out of business.
REX launched a lawsuit against Zillow in April 2021, alleging that Zillow engaged in anticompetitive practices through website redesigns that confused consumers and made it difficult for them to view REX listings. U.S. District Judge Thomas Zilly dismissed the antitrust claim, but REX’s claims of false advertising and consumer protection remain.
According to REX, changes made to Zillow’s website last year had the effect of depriving REX of the exposure it needed to thrive. According to an expert working with REX, the company was valued at $444 million when it went out of business last year, though Zillow has asked for this figure to be excluded from the trial as an “inappropriate measure” of damages.
The trial will include legal representation from both Zillow and REX. Zillow insists that REX’s accusations are baseless, aiming to prove that the company failed for reasons unrelated to Zillow. An unnamed Zillow spokesperson stated that the dismissal of REX’s antitrust claim was a “big step towards us prevailing in this case given their main argument has been tossed.”
Meanwhile, REX’s legal team intends to demonstrate that REX was a disruptor in the residential real estate industry. According to a lawyer for REX, “If you are not on Zillow, which is the 800-pound gorilla of aggregator websites, you are cut off from a necessary marketing channel.” REX seeks to prove that Zillow’s website redesign marginalized REX and other non-member listings placed on the Multiple Listing Services, an association of realtors who display properties for sale. REX argues that Zillow’s commission rule resulted in higher rates in the U.S. compared to other countries, and Zillow’s lawyers are attempting to bar REX from making this argument at the trial. They are also seeking to bar REX from calling Zillow CEO Rich Barton as a witness.
The upcoming trial promises to be an exciting battle between two of the most influential companies in the residential real estate industry. Both Zillow and REX have much at stake, and the outcome of the trial could have far-reaching implications for the entire industry.