Compass Faces Federal Antitrust Lawsuit From Multiple Listing Services
Six MLS organizations accuse the real estate giant of antitrust violations and undermining the integrity of public listing networks.
Six multiple listing services (MLS) from across the United States have filed a federal lawsuit against mega-brokerage Compass International Holdings, alleging antitrust violations and seeking to preemptively block Compass from filing its own lawsuits against them. The suit, lodged in the Southern District of New York, was filed by Arizona Regional MLS, Bridge MLS, Canopy MLS, REcolorado, Hive MLS, and Doorify MLS.
This action follows a similar lawsuit filed earlier this month by California Regional MLS. Sources indicate that other MLS networks are expected to join these legal challenges, including OneKey MLS, which serves the metropolitan New York area.
The core of the dispute centers on Compass's network of private listings. Critics argue that this practice, which keeps properties from public view, interferes with the transparency and fairness of the traditional MLS system. They contend that Compass's private listings grant the brokerage an unfair competitive advantage and undermine the established real estate marketplace.
Compass maintains that its private listing network offers brokers and sellers “choice” and allows them to “test the market” without the public exposure of days on market or price reductions. The company also seeks to list properties on MLS networks without adhering to their standard rules. In states like California, brokers are typically required to post listings within 24 hours of marketing them to avoid fines.
OneKey MLS CEO Richard Haggerty stated in defense of his organization's position, “Withholding inventory… restricts buy access… potentially limiting a seller’s return on their investment. Consumers deserve the freedom to work with the professional they trust without being limited to one company’s private inventory.”
The legal battles have intensified over the past year, particularly after Compass's merger with Anywhere Real Estate in January. In addition to the MLS lawsuits, Compass is reportedly under investigation by the New York Attorney General, as well as attorneys general in the District of Columbia and Tennessee, for alleged antitrust law violations.
A spokesperson for Compass stated, “Only the law and the homeowner should tell agents how to publicly market a home,” when asked about the private listings. The company declined to comment on the state attorney general investigations.
Compass has also been involved in a legal dispute with Zillow, the largest public real estate platform in the country. Last year, Compass filed an antitrust suit against Zillow after Zillow barred listings that had been marketed elsewhere first. After a federal judge refused to block Zillow's rules, Compass dropped the case and subsequently partnered with Chicago's MLS, MRED, to expand its private listing network nationally. Zillow then sued Compass and MRED, alleging a conspiracy to cut off its Chicago listing feed. A federal judge later dissolved a temporary restraining order that had restored Zillow's feed, finding Zillow had not made a strong enough case for an injunction, though the core issues remain unresolved.
Zillow claims that Compass’s business model is “dependent on gatekeeping access to listings” to steer consumers toward its own services and disadvantage smaller brokerages. Compass CEO Robert Reffkin, however, called a recent ruling in the Zillow case a “significant win for homeowners and our real estate professionals nationwide,” asserting that homeowners should have the right to choose how their properties are marketed.
Rival real estate executives have voiced concerns. Bess Freedman, CEO of Brown Harris Stevens, stated that accessing Compass's private listings is difficult and has allegedly led to Compass poaching clients from other brokerages. "Why should we have to be a detective to get the information?" Freedman asked, adding that Compass's narrative of seller choice is a "manufactured narrative to own the marketplace."
Longtime appraiser Jonathan Miller noted two key controversies surrounding Compass: its merger with Anywhere Real Estate, which he suggested created a monopoly or near-monopoly in many markets, and its misleading consumers about the benefits of private listings. Miller argued that "testing the market" via private listings is ineffective and that homes typically sell for less when not on an open market.
Senators Elizabeth Warren and Cory Booker have also urged the Federal Trade Commission (FTC) to investigate anti-competitive practices, including private listings, citing concerns that they create barriers to access and undermine fair housing objectives.
Compass spends approximately $100 million annually to service its $3 billion debt from the Anywhere acquisition. While not all Compass brokers utilize the private listing network, with some high-end brokers in New York and Los Angeles opting for public listings for their clients, managers actively encourage its use through financial incentives.