CoStar Heaps Extra Pressure on "Red Handed" Zillow in Lawsuit Update

CoStar Group "will vigorously pursue" legal reparations against Zillow, saying its rival "isn't bothered" about a lawsuit CoStar claims could be worth over a billion dollars in damages.

CoStar released an update on its lawsuit today, two months after alleging copyright infringement against Zillow in July, when CoStar claimed no fewer than 46,000 CoStar-owned images had appeared on Zillow's portal, as well as Realtor.com and Redfin.

"Zillow’s free ride on the agents’ listings and CoStar Group’s proprietary content is over," said CoStar boss Andy Florance, accusing Zillow of engaging in "a pattern of morally questionable behaviour."

In a press release, CoStar said Zillow continues to display almost 8,000 of the specific images CoStar identified in July, while accusing the company of copyright infringement for an additional 7,000 CoStar-owned images.

CoStar said:

Zillow’s infringement is not passive, or incidental, and its customers are not to blame.

Zillow's infringement is rampant and ongoing... infringing thousands more of CoStar Group’s watermarked photographs, and it has not even bothered to remove from its site all of the images that CoStar Group identified in its lawsuit. Since CoStar Group filed suit, Zillow has displayed at least 4,618 additional CoStar Group-owned images.

Zillow touts itself as a leading technology company and claims to be able to detect features like granite countertops in real estate images. While Zillow uses this technology to build its own products, apparently it refuses to use the technology to take basic steps toward respecting others’ intellectual property.

Florance said:

"Despite being caught red-handed blatantly stealing our copyrighted work, Zillow has double downed to exploit thousands of additional copyrighted images without any shame. Zillow’s repeated copyright infringement, combined with its lead-diversion model that is the subject of a separate lawsuit accusing Zillow of deceiving home buyers, exposes an ongoing pattern of morally questionable behavior. Zillow’s free ride on the agents’ listings and CoStar Group’s proprietary content is over."

CoStar also claims that the company is fueling its rentals business by monetising CoStar-branded content, with lead counsel Gene Boxer saying the Group looks forward to holding its rival to account:

"Zillow is building its rental business on stolen photos. Tens of thousands of them, many stamped with our watermark. That’s deliberate mass infringement. Zillow calls itself a tech company, yet supposedly it can’t spot images plainly marked with CoStar Group’s logo. That doesn’t pass the straight-face test. The truth is simple: Zillow used our watermarked images, it profited, and—stunningly—it has kept doing it. Rather than learn its lesson, it doubled down, and the infringement scheme got even larger. We look forward to holding Zillow to account."

Writing in specialist legal publication, IPWatchdog, lawyer and intellectual property expert Bruce Abramson suggested the outcome of the lawsuit will live and die by copyright legislation known as the safe harbour provision.

CoStar's lawsuit is partially built around the claim that Zillow hand-picks and uploads webpages for off-market properties, then offers marketing packages to agents who claim those properties for their sell-side agency or brokerage.

But under safe harbour provisions, Zillow could be protected from CoStar's lawsuit if it successfully argues that it didn't profit from copyright infringement and only individuals and third parties posted infringing material on its site without the company's knowledge.

If Zillow didn't publish the images, the company could remove the offending images from its portal, settle with CoStar, and move on.

But if the courts decide Zillow did publish the images, it would strike a hammer blow to Zillow's pockets—Abramson's blog suggests the lawsuit is a "$7 billion problem"—and, perhaps even worse, its business model.

Zillow, which has yet to comment on the case, must respond to the lawsuit today, (September 30, 2025).