Zillow Antitrust Lawsuit Thrown Out By Court—Again

A federal district court has thrown out a false advertising and antitrust lawsuit against Zillow for the second time.

Zillow was sued over its For Sale By Owner listing feature by FSBO site Picket Fence in December 2020.

Picket Fence alleged that Zillow used a predatory pricing model that unfairly directed FSBO homebuyers directly to Zillow's paid advertising customers, a claim which was dismissed in August 2021.

Now an amended claim has been thrown it, marking the second time the case has been dismissed.

Picket Fence has until September 23 to appeal the decision—an option it intends to exercise.

Picket Fence has argued that:

"Zillow has engaged in illegal and unfair methods of competition as well as fraud and deceit by setting up a bait and switch scheme for Zillow’s ‘free’ listings for For-Sale-By-Owners and then making it difficult, or impossible, for prospective buyers to contact those seller’s directly.

"Zillow’s pricing scheme is also predatory, in that Zillow claims it is offering a service for free, but in reality is charging the Premier Agents so they can advertise on the website of those free ads and receive hijacked inquiries from deceived buyers. This creates an unfair playing field for legitimate For-Sale-By-Owner publications."

After the first complaint was dismissed, Picket Fence was allowed to amend its claim, which it did.

Zillow then asked the court to dismiss the amended complaint in October 2021, with the request granted last week.

Judge Christina Reiss ruled against Picket Fence, saying a “non-consumer competitor” could not bring claims on the consumer’s behalf, nor had Picket Fence “plausibly plead the essential elements of a predatory pricing claim.”

"Defendant’s practices do not preclude consumers from advertising with multiple FSBO listing services simultaneously."

On the false advertising claim, Reiss said:

"Picket Fence has not identified a statement made by Defendant that is ‘either literally or impliedly false'.

"A FSBO seller remains free to decide with whom and how it wants to sell any property it lists on Defendant’s website. Stated differently, a FSBO seller may refuse to deal with a real estate agent and refuse to pay a commission."

After the ruling, a Zillow spokesperson said:

"We strive to serve as a fair and open online marketplace by providing consumers with access to the most information available about residential real estate, which includes giving homeowners the option of using for sale by owner (FSBO) postings on our site for free."

"Additionally, as part of our mission to empower all consumers, our site provides shoppers with tools that help them find their next home such as the option to connect directly with the seller of a FSBO or a real estate professional."