Zillow’s recent federal antitrust suit against Midwest Real Estate Data (MRED) and Compass is being marketed as a defense of consumer transparency. To an economist, it reads as something more familiar: a dominant platform invoking the consumer-friendly language of open markets to protect its own turf.
This maneuver is not unique to real estate or homebuying interfaces. When a firm controls the dominant discovery layer in a two-sided market – buyers on one side and sellers and agents on the other – it makes a lot of money simply by standing in the middle. Anything that lets sellers reach buyers through alternative channels erodes that business model. And so the dominant company tends to describe any alternative as bad for consumers, whether it actually is or not.
Zillow is currently fighting to exclude private listings that originate outside its partner network – whether it’s Compass, MRED, or another brokerage willing to truly innovate. Zillow has consistently argued that the private listing networks are closed shops that hide inventory and disrupt the marketplace. This is clear in its explanation of its listing access standards that prevent listings “from being kept out of the broader market.”
If that’s truly the aim, broader access even to private listings, then why are they fighting to exclude Compass’s private listing from its platform? A more honest reading is that Zillow is fighting to maintain its profit model.
Join the conversation as a VIP Member