Compass has sued an MLS. History could shed light on its antitrust claims

When it comes to how listings are displayed or controlled, a better example is a legal battle involving Michigan-based MLS Realcomp II and the Federal Trade Commission (FTC) that ended nearly 15 years ago.

Trip down memory lane

The RealComp II suit stemmed from a rule adopted by the MLS in 2001, which stated that “listing information downloaded and/or otherwise displayed pursuant to IDX shall be limited to properties listed on an exclusive right to sell (ERTS) basis.”

As a result of this policy, listings using exclusive agency (EA) listing agreements and not ERTS agreements would not be transmitted to “approved” real estate listing websites. These included Realcomp member IDX websites, Moveinmichigan.com and Realtor.com. 

In their respective suits, lead plaintiffs Home Quarters Real Estate, a defunct discount brokerage that utilized EA agreements, and Eugene Allan, a Michigan home seller, claimed that they were harmed by Realcomp’s policy. They claimed it prevented discount brokerages from competing in the marketplace, forcing sellers to pay more for brokerage services. 

“Through these anti-competitive policies, Realcomp members using ERTS listings profited by illegally inhibiting competition from brokers (a) using or desiring to use EA or other discount listings within Realcomp’s MLS, and (b) desiring to expose EA and other discount listings to the public through feeds from Realcomp’s MLS to the Approved Websites,” states the Allan complaint, which was originally filed in October 2010.

These claims echo those made by the FTC in its October 2006 administrative complaint.

The two lawsuits filed by Home Quarters were dismissed and the Allan suit ended with a settlement. Additionally, the FTC’s action resulted in a final order requiring Realcomp “to provide its members non-discriminatory access to non-traditional and lower-price listings on its MLS and to stop preventing such listings from being sent to its public real estate sites.”

Fast forward to 2025

Compass’s suit, like the Home Quarters case, alleges that the MLS defendant is stifling competition by not allowing the brokerage plaintiff to fully utilize its “unique business model.” But unlike Home Quarters, Compass operates as a traditional brokerage.

While the FTC case ended with the ruling that Realcomp’s policy stifled competition, it remains to be seen how the court will view the allegations Compass has made against NWMLS. 

In its suit filed last week in U.S. District Court in Seattle, Compass claims the NWMLS — which is owned and controlled by some of the largest brokerages in the Seattle area — is a monopoly and that Compass is being harmed by its anticompetitive rules. Chiefly, it says that NWMLS’s listing policy, unlike NAR’s Clear Cooperation Policy (CCP), does not allow for office exclusives. 

“[Office exclusives] can be further disfavored by MLSs, whose financial incentives are directly correlated to the number of listings included on their database,” the complaint claims. “The fewer properties for sale outside of the MLS, especially any potentially included on another listing network database, the more the MLS benefits financially.”

According to Paul Rogers, an antitrust law professor at Southern Methodist University’s Dedman School of Law, in order for Compass to win its Sherman Antitrust Act claim, it will have to check several boxes.

“First, they have to prove that NWMLS is a monopoly,” Rogers said. “Then the second question is, what kind of conduct are they engaging in? Are they engaging in conduct which harms consumers, and are they using their monopoly power to maintain their monopoly by what we call exclusionary conduct?”

By getting that far into the antitrust analysis, Rogers said Compass will have to prove that the rules harming consumers are also harming competition. 

“What the plaintiffs have to show is that the consumers are harmed, and because they’re harmed, so are competitors,” Rogers said.

This is exactly what Home Quarters and Allan tried to prove in their suits against Realcomp, and what was eventually found to be true via the FTC’s action. 

What about Zillow?

Although a lot of attention has been focused on Compass’s fight with NWMLS, Compass CEO Robert Reffkin has also made some public statements claiming that Zillow is also engaging in anticompetitive behavior. 

Earlier this month, Zillow announced a ban on all listings that have been publicly marketed without being entered in the MLS. Reffkin later claimed in a post on LinkedIn that this “constitutes platform-based exclusionary conduct similar to the conduct successfully challenged by the DOJ in United States v. Google in 2023.” 

Reffkin went on to say that, if Zillow was “successful in suppressing off MLS public marketing in US real estate, it will prove its market dominance.” According to data from SimilarWeb, Zillow had an average of 353.8 million visitors during the first three months of the year, more than double that of its next largest competitor, Realtor.com (125.3 million visitors).

“Zillow banning homeowners who don’t give them their publicly marketed listings is like Google saying ‘If you advertise anywhere, you must advertise on Google. And if I see you advertise anywhere else — even a social post, newsletter or postcard — for more than one day and you haven’t advertised on Google, then I’m going to ban you from ever being on Google,’” the post stated. “Is Zillow really protecting the buyer and seller or is Zillow protecting the MLS and its free listing supply chain?”

Due to Zillow’s commanding market share of listing portal web traffic, Rogers said he can see where Reffkin has drawn parallels between the real estate giant and Google. But if a suit were to arise, Compass and Reffkin would still have quite a few things to prove. 

“Zillow, like Google, is an independent entity with a large market share, so in a potential lawsuit, if it was found to be a monopoly power, that would be a big problem for it,” Rogers said.

“But then they would have to prove that consumers were being harmed by Zillow’s actions as a monopoly power, so they would probably argue that Zillow is harming consumers by not showing those listings that were publicly marketed before showing up in the MLS. But the question is, do they have the obligation to do this as a monopolist?”

Will history repeat itself?

As the battle over CCP becomes more litigious, it is still a possibility that a government entity may get involved. But Steve Murray, the co-founder of RealTrends Consulting and an expert witness for the FTC in its suit against Realcomp, does not believe that the FTC will reprise the role it had in changing Realcomp’s policy.

“I think in this case it would more likely be the Department of Justice (DOJ),” Murray said. “The FTC, their purview is harmful consumer conduct. The DOJ antitrust division looks at that as well, but it is normally business issues like monopolies that affect consumers, which is what they looked at in the 2023 Google suit.”

Attorney Rob Hahn, the founder and CEO of Las Vegas-based online property exchange Decentre Labs, shared a similar viewpoint on his NotoriousROB blog. 

“The bigger threat, as I see it, comes not from Compass but from the DOJ where the guy who just took over the #2 position in the Antitrust Division has said very clearly in the past that the MLS is a problem. The lack of competition for listing services is a problem for the DOJ,” he wrote. “The DOJ might take [the Compass v. NWMLS] case as an opportunity to intervene, so it doesn’t have to bring its own action, and send a clear message to everybody that they view a lack of choice for brokers and agents in any given market for listing services to be a problem.”

The DOJ issued a second civil investigative demand into CCP back in 2021. But it recently wrote in a footnote in an amicus brief in the Nosalek commission suit that “The Division has not taken a position that such policies standing alone (i.e., without mandated MLS publication of offers of compensation or exceptions benefitting primarily large brokerages) are anticompetitive.” 

Despite this, it is possible that the claims made by Compass in its suit against NWMLS — and in a potential lawsuit against Zillow — could change the DOJ’s neutral stance. This would ratchet up the intensity of the CCP debacle.