Zillow is being sued by a group in New Jersey. The group alleges that letting some partners move the Zestimate valuation tool lower down on the listings hurts the competition and amounts to a violation of US anti-trust laws.
In a recently filed suit in the US District Court in New Jersey, EJ MGT sued Zillow Group over a home listing in Cresskill, New Jersey that was posted on Zillow's website. The privately held company in Englewood Cliffs, New Jersey set the price for the eight-bedroom, 10-bathroom "palatial mansion situated on a private cliff" at just under $7.8 million, but the Zestimate for the home was set to only $3.7 million. The complaint is that EJ MGT alleges several buyers were dissuaded from buying the home due to the miscalculation.
The group accuses Zestimate of being an inaccurate tool and claims Zillow acknowledges that. Usually, the Zestimate is the most prominent aspect of a listing. It appears just below the price.
“In essence, Zillow is disseminating misleading and inaccurate pricing information that has gained prominence because of Zillow’s market power, and charging downstream participants to hide this negative information that Zillow, itself, acknowledges being inaccurate,” according to the suit. “Further, members of the public have no way to prevent Zillow from obtaining this information, and they cannot alter its display once Zillow presents it unless they hire a broker that is party to the Zestimate Agreement.”
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