(Bloomberg) — In Chicago, scrolling Zillow for dream homes or apartments may soon be a thing of the past.
The organization that manages the residential real estate listings in the nation’s third-largest city and its surrounding suburbs has suspended data access for Zillow Group Inc., part of what has become an escalating feud between the listing behemoth and brokerage firm Compass Inc.
Midwest Real Estate Data LLC, the local multiple listing service operator, said Wednesday it has blocked Zillow from data on 43,000 properties because the website excludes a handful of homes previously offered in private listings. The move follows a federal lawsuit Zillow filed last week claiming MRED and Compass colluded to hide some homes from buyers and harmed competition in the residential real estate market.
MRED Chief Executive Officer Rebecca Jensen said all listings should be shown, as required by its data licensing agreement.
“Our rules apply equally to every participant, and we have a duty to educate our participants and vendors, counsel them when they are out of compliance, and require that breaches be cured,” Jensen said in a statement.
As of 12:30 pm New York time, MRED data was still being used on Zillow’s app, though the Seattle-based company said it has started removing the listings.
“Chicagoland homebuyers and sellers this morning have far worse access to the housing market than they had yesterday, because their local MLS decided one megabrokerage’s profits mattered more than their ability to achieve the American Dream,” Zillow said in a statement.
An MLS typically requires a real estate license and membership to submit a property listing. That data is then distributed to consumer-facing sites like Zillow and Redfin, where the public is able to view listing photos and information about the property. MRED said the dispute involves nine listings out of 43,000 that Zillow refused to display.
Last year, Compass sued Zillow in New York, claiming the company is using “anticompetitive tactics” with its plan to restrict certain listings. Compass dropped the suit in March after a federal judge denied its request to temporarily block Zillow from refusing to list homes that have been advertised elsewhere first.
At the core of the conflict is Compass’ push to encourage sellers to first market their homes to agents at the firm. Zillow has argued that there should be transparency and has instituted a policy saying that it will block certain listings that are publicly marketed for more than 24 hours before being posted to a local multiple listing service. That means Zillow then removes the Compass listings that previously were marketed only within the firm.
Two weeks ago, Zillow told MRED it would begin to exclude certain listings, and the listing service told Zillow those exclusions violated its license agreements, MRED said in the release. Zillow had until Tuesday to come into compliance with the MLS.
Compass, in a statement issued before MRED pulled its listings, said, “Chicago has long been a model for an open, competitive marketplace that empowers homeowners while ensuring broad access to housing information. Buyers in Chicago should not be deprived of access to listings because a platform disagrees with how a homeowner chooses to market their property.”
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