American portal giant Zillow has won the first part of its legal battle against discount brokerage firm REX after a judge decreed that REX's complaints did not warrant a preliminary injunction. According to US agency publication inman.com, the court filings also include the judge's request for REX to stop referring to Zillow and the National Association of Realtors as a 'cartel' in their submissions.
After Wednesday's ruling, REX's CEO Jack Ryan released a statement saying that his company was “disappointed that consumers will continue to face the NAR segregation rule every time they visit Zillow” while a Zillow spokesman told inman.com "We’ve consistently maintained REX’s allegations are without merit... We are pleased with the court’s decision denying REX’s motion for a preliminary injunction".
Background on a potentially damaging case with big repercussions
Apart from potentially having financial repercussions for the defendants, the case is significant not only for Zillow, NAR and REX but for all property marketplace sites using IDX feeds (Realtor.com, Redfin) and potentially for the real estate ecosystem.
If the judge had granted REX's request for a preliminary injunction, Zillow and all other sites using NAR regulated IDX feeds would have been forced to include REX's listings in their main listings pages and not on a separate tab, giving an important boost to REX's business which charges far lower commissions that the traditional 6%. Such a move could well have been a catalyst for other discount brokerages to enter and disrupt the market.
With the preliminary injunction avoided, Zillow and other online real estate marketplace sites will not have to alter the way they display listings for now despite Ryan's assertion that his company's pursuit of the matter is "far from done".