The controversies surrounding Compass that have swirled all year just got hotter for the world’s largest real estate brokerage.
asserted
that → surround → brokerage
On Thursday morning, six multiple listing services from across the country filed a federal lawsuit in the Southern District of New York against Compass International Holdings as a preemptive move to stop the mega-brokerage from filing antitrust lawsuits against them for imposing rules on brokers.
asserted
services → file → brokers
The suit — from Arizona Regional MLS, Bridge MLS, Canopy MLS, REcolorado, Hive MLS and Doorify MLS — follows a similar one filed earlier this month in the same court by the California Regional MLS.
asserted
suit → follow → MLS
Other MLS networks are expected to pile onto both lawsuits, sources told Gimme Shelter, including OneKey MLS, the MLS for metropolitan New York, which did not return calls for comment at press time.
asserted
which → expect → time
On Tuesday, OneKey’s CEO, Richard Haggerty, posted a statement defending its position: “Withholding inventory … [restricts] buy access … potentially limiting a seller’s return on their investment.
asserted
Withholding → post → investment
Consumers deserve the freedom to work with the professional they trust without being limited to one company’s private inventory.”
asserted
they → deserve → inventory
A Compass network of private listings — meaning listings that are not in public view for house hunters to browse — is at the center of the disputes, which have only grown hotter in recent months.
asserted
which → mean → months
Critics say the private network interferes with the free, fair and transparent nature of public listing networks and — as per today’s suit — argue that Compass private listings give the brokerage an unfair competitive advantage and undermine the MLS (multiple listings service) system.
asserted
listings → say → system
For its part, Compass says it gives brokers and sellers “choice” to “test the market” without pesky information like how many days the home has lingered on the market or how many price drops it may have had.
uncertain
it → say → drops
Compass also wants its brokers to be able to post their listings on MLS networks without following MLS rules.
asserted
brokers → want → rules
In a state like California, brokers must post listings within 24 hours of marketing them or face fines.
asserted
brokers → post → fines
The heat began increasing in January, when Compass merged with Anywhere Real Estate in a $1.6 billion all-stock deal.
asserted
Compass → increase → deal
Privately, Compass executives told Gimme they are confident the deal is too big to unwind.
asserted
deal → tell → Gimme
But that hasn’t stopped New York Attorney General Letitia James as well as attorneys general in at least two other jurisdictions — the District of Columbia and Tennessee — from investigating Compass for violating antitrust laws.
asserted
that → stop → laws
A Compass spokesperson would not comment on the state attorney general antitrust investigations.
asserted
spokesperson → comment → investigations
As for private listings, the spokesperson said: “Only the law and the homeowner should tell agents how to publicly market a home.”
asserted
law → say → home
Compass is also battling Zillow, the country’s largest public real estate and marketing platform.
asserted
Compass → battle → Zillow
Last year, after Zillow barred listings from its site that had been marketed elsewhere first, Compass filed an antitrust suit in New York.
asserted
Compass → bar → York
After a federal judge refused to block the rules, which Zillow amended, Compass dropped the case.
asserted
Compass → refuse → case
Compass then partnered with the Chicago MLS, MRED (Midwest Real Estate Data), to make its private listing network national.
asserted
network → partner → MLS
In May, Zillow sued them both in Illinois, alleging they conspired to cut off its Chicago listing feed unless it carried Compass’s private listings.
uncertain
it → sue → listings
After a temporary restraining order restored Zillow’s feed, a judge ruled that Zillow did not make a strong enough case for an injunction and dissolved the order.
asserted
Zillow → restore → order
While the issues at the heart of the battle remain unresolved, both sides were able to claim a victory of sorts.
uncertain
sides → remain → sorts
“The key unresolved issue isn’t really between Zillow and Compass, it’s between Compass and the rest of the real estate industry who want to keep the fair and transparent market that this country has built up over decades,” a Zillow spokesperson told Gimme Shelter.
asserted
spokesperson → ’ → Shelter
“Compass became the largest real estate brokerage in the country, then leveraged its size to create a business model dependent on gatekeeping access to listings, so they can force consumers into their ecosystem and cut off agents at smaller brokerages from being able to compete.”
asserted
they → become → brokerages
Both Zillow and Compass claimed victory last month when a federal judge on the U.S District Court for the Northern District of Illinois denied Zillow’s motion for a preliminary injunction against Compass and MRED.
asserted
judge → claim → Compass
Compass CEO Robert Reffkin called the ruling “a significant win for homeowners and our real estate professionals nationwide,” adding that “homeowners deserve the right to choose how their properties are marketed and no one should be penalizing agents for simply following their client’s lawful instructions.
asserted
one → call → instructions
As a company, we will continue to champion pro-competitive, pro-consumer, and innovative services and products that deliver positive outcomes for all our stakeholders.”
asserted
that → continue → stakeholders
While Compass says its private listings are available to non-Compass brokers upon request, rival Brown Harris Stevens CEO Bess Freedman says that access is difficult and has led to Compass allegedly poaching non-Compass clients.
uncertain
Compass → say → clients
“Why should we have to be a detective to get the information?” she told Gimme.
asserted
she → have → Gimme
“They are framing it as sellers’ choice.
asserted
They → frame → choice
But it’s a manufactured narrative to own the marketplace because sellers already have choice.
asserted
sellers → ’ → choice
If they have 50 to 60% of the market share and their listings are only with Compass first, then Compass agents gets the deals.
asserted
agents → have → deals
Why don’t they want a transparent market?”
asserted
they → want → market
“They bypassed federal oversight and were able to merge with Anywhere creating a monopoly or a near monopoly in many housing markets across the country,” Miller said, adding that the FTC limits market share to 30%.
asserted
FTC → bypass → %
Compass declined to release its market share when asked by Gimme Shelter.
asserted
Compass → decline → Shelter
The other problem, Miller said, is that Compass is misleading consumers into believing that private listings get better prices when, he alleges, they don’t.
asserted
they → say → prices
He added that “testing the market” by way of private listings is “ridiculous.
asserted
testing → add → listings
It’s like asking your neighbor what you think the value of your home is.”
asserted
value → ’ → home
“It’s a classic antitrust story,” a former Justice Department antitrust enforcer told Gimme Shelter.
asserted
enforcer → ’ → Shelter
…and 20 more, not listed.
The Aporia
