A judge also dismissed REX’s request for a preliminary injunction against NAR and Zillow. REX applied for the injunction after claiming that it was the victim of anti-competitive practices.
Zillow and the National Association of Realtors (NAR) scored a victory in their legal fight against discount brokerage REX on Wednesday when a judge said REX failed to prove he was irreparably hurt by what he did. called a real estate “cartel“.
The judge also told REX to stop labeling Zillow, NAR and others as a âcartelâ.
The case first erupted in March. At the time, REX – which said it wanted to “dramatically cut commissions” and aims to operate outside the traditional multiple listing service (MLS) system – said in a court file that “former members of a cartel “had” regrouped “. boycott a nascent competitor.
There are a number of claims in the case, some of which relate to agent commissions. But the bottom line is that REX accused members of the real estate establishment of anti-competitive practices that separated and marginalized REX’s listings.
Zillow was drawn into the case thanks to a change in the way he obtains his data and a move to put more emphasis on agent lists. REX disputed the changes, saying they resulted in a “significant loss of traffic” for the discount brokerage’s listings and were being relegated to less space on the website, according to its lawsuit.
Zillow continued in April.
REX’s objective when it filed the complaint was to obtain a preliminary injunction. Essentially, that means he wanted court-ordered rules that would limit what NAR and Zillow could do with the lists. Among other things, REX wanted the court to ban NAR, Zillow, and their partners from engaging in “any anti-competitive behavior” and separating or excluding REX’s listings.
But in Wednesday’s decision, the judge sided with Zillow and NAR.
Among other things, the judge concluded that REX had not demonstrated “a probability of irreparable harm”, nor proved that the practices of Zillow, NAR and their partners threaten the existence of REX.
“The plaintiff claims he is a market ‘disruptor’ in the real estate industry, but has failed to demonstrate, for example, that he has engaged in extensive marketing efforts to carefully control branding it as unaffiliated with NAR or an MLS, “ruling states 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 of the case, Wednesday’s decision is also peppered with footnotes, many of which add context and commentary. The seventh footnote deals directly with the use of the word “cartel” and asks REX to move away from that language.
“The Court discourages any future use of the term ‘cartel’ to describe the conduct of the defendants,” the footnote says, “which is neither convincing nor broadly correct.”
After reaching out to REX on Wednesday afternoon for comment, the company directed Inman to a statement in which CEO Jack Ryan said: âWe are disappointed that consumers continue to face the NAR segregation rule whenever ‘they are visiting Zillow. ” Ryan also said that REX “will not stop” pursuing the case, which “is far from over.”
âREX will continue to innovate for consumers while building its case against old industry rules that stifle consumer choice and competition,â Ryan continued in the statement. “In an era of skyrocketing home prices and the supply of homes for sale at an all time high, consumers deserve to see every home on the market.”
On the other hand, Zillow expressed his satisfaction, with a spokesperson saying in a statement to Inman on Wednesday: “We have always maintained that REX’s claims are unfounded.”
“We are delighted with the court’s decision to dismiss REX’s motion for a preliminary injunction,” the statement added, “and its recognition of our commitment to give consumers the most complete and up-to-date information possible on the accommodation and lists “.
Read Wednesday’s decision here:
Email Jim Dalrymple II