Zillow vs. Compass: What This Lawsuit Really Means for Real Estate

The real estate world is buzzing over a high-stakes lawsuit between two major players: Compass (the company I work for) and Zillow. If you’re a real estate agent, buyer, or seller, this isn’t just background noise. What’s happening could directly impact how homes are marketed, listed, and found online—especially if you value flexibility and control in the selling process.

Here’s everything you need to know about the lawsuit, the Clear Cooperation policy, and why our CEO Robert Reffkin is taking a bold stand.

The Backstory: What Sparked the Lawsuit?

On June 23, 2025, Compass filed a federal lawsuit against Zillow in the Southern District of New York (where our offices are headquartered). At the heart of the issue is Zillow’s new listing policy. Beginning May 28 (with enforcement starting June 30), Zillow announced it would no longer show any listing that had been publicly marketed for more than 24 hours without also being in the MLS. This policy effectively blocked Compass’s three-phase listing strategy, which includes:

• Phase 1: Private Exclusive (available only to Compass agents and clients)

• Phase 2: Coming Soon (on Compass.com)

• Phase 3: Full MLS syndication

Compass argues that this move was not about fairness or transparency, but about control. The lawsuit alleges anticompetitive behavior, monopolistic practices, and a coordinated effort between Zillow, Redfin, and eXp to shut down Compass’s unique marketing approach. An interesting thing to keep in mind as this unfolds is that Zillow is ALSO a brokerage which means it has the same rules as the rest of the brokerages.

Clear Cooperation: The Policy Behind the Drama

To understand the deeper implications, we need to look at NAR’s Clear Cooperation Policy. This rule, which took effect in 2020, requires that if a listing is publicly marketed, it must be entered into the MLS within one business day. Originally, this policy was created to promote fairness and transparency. But critics, including Reffkin, say it limits innovation and was specifically designed to stifle companies like Compass.

Many industry insiders even refer to it as “The Compass Rule” since it seemed tailor-made to dismantle Compass’s off-MLS marketing strategies. Robert Reffkin has made it clear that Compass does not support Clear Cooperation and has never agreed to abide by it on a national level.

In a letter dated July 1, Reffkin told NAR and MLS leaders that Compass will now decide how to handle Clear Cooperation on a market-by-market basis. He also noted that the policy is currently under government investigation, adding another layer of legal uncertainty.

What Compass Is Alleging

The Compass lawsuit outlines several major accusations:

1. Monopoly and market control:
Zillow holds enormous sway over consumer access to listings, with over 227 million monthly users. Compass says Zillow used this reach to push out competitors who market listings differently. They also make money off of everyone's listings by selling the leads to agents who pay them for them.

2. Exclusion of alternative marketing models:
Compass argues that even though Clear Cooperation allows “office exclusives,” Zillow’s ban goes a step further. It blocks listings that aren’t in the MLS even if they’re only marketed within a brokerage.

3. Coordination between competitors:
According to the complaint, Zillow did not act alone. Within minutes of Zillow’s policy change, Compass received confirmation that Redfin and eXp would also comply. This timing is cited as potential evidence of collusion.

4. Coercive pressure:
The suit also claims that Zillow executives pressured Compass to abandon its three-phase strategy. When Compass refused, Zillow allegedly retaliated by enforcing the ban and threatening to block Compass from Zillow entirely.

Robert Reffkin’s Public Stand

Robert Reffkin, Compass’s founder and CEO, has been vocal in his defense of agent and seller choice. In multiple public statements, he’s emphasized that this lawsuit is not just about company rivalry—it’s about consumer rights and the freedom to choose how a home is marketed.

Reffkin encourages buyers to check multiple portals when searching for homes. He says relying on just one site, especially one limiting listings like Zillow, puts consumers at risk of missing opportunities. He has also reiterated that Compass will not require agents to follow Clear Cooperation unless it makes sense in their local market.

In his words: “This isn’t competition. This is coercion.”

What Zillow Says in Response

Zillow has called the lawsuit “baseless” and insists that its listing policy is about fairness for buyers. The company argues that if a property is being marketed to the public, it should be widely available through the MLS so that every buyer has equal access. From Zillow’s perspective, private listings or Coming Soon models create an unfair playing field.

But Compass sees it differently. The lawsuit describes Zillow’s move as an attempt to limit consumer choice and punish brokerages that refuse to play by their rules. Zillow’s primary concern since inception has simply been Zillow.

How This Could Impact the Industry

The stakes here go far beyond just Compass and Zillow. This legal battle touches nearly every major debate in real estate right now:

• Transparency vs. exclusivity:
  Should every listing be instantly available to all buyers, or should sellers and their agents have the flexibility to test the waters first?

• Who controls the data:
  If big portals like Zillow can dictate listing requirements, do brokerages lose the ability to market properties in a way that works best for their clients?

• The role of the MLS:
  Policies like Clear Cooperation were created in the name of fairness, but many agents now see them as outdated or overly restrictive.

Depending on how this lawsuit plays out, it could redefine listing timelines, reshape MLS policy, and shift the power dynamics between brokerages and third-party platforms.

Final Thoughts

Whether you’re an agent trying to serve your clients better or a buyer looking for a dream home, this lawsuit matters. Compass is taking a stand against what it views as an unfair consolidation of power in real estate. Zillow, meanwhile, believes it’s protecting consumers by ensuring everyone sees the same listings.

What’s really at stake is how flexible and innovative the future of real estate will be. Stay tuned—this one is just getting started.