CoStar Looking to Do Zillow Like It Did Xceligent

It is no secret that CoStar and Zillow have been at war ever since CoStar entered the residential real estate portal business in 2021. I figured it was simply a matter of time before that war gets serious and that CoStar would use a big lawsuit to escalate.

Well, that big lawsuit just landed. From Reuters:

Zillow was sued on Wednesday by Homes.com owner CoStar Group, which accused the largest U.S. online real estate portal of publishing at least 46,979 copyrighted photos without permission.

The complaint filed in Manhattan federal court seeks unspecified compensatory and punitive damages, which Arlington, Virginia-based CoStar estimated could exceed $1 billion.

I initially figured this was about Homes.com vs. Zillow, and it would involve CoStar’s ownership of Matterport and VHT. That was going to be a complicated and very difficult battle involving the complex interplay between brokers, agents, the MLS, chain of licenses and sublicenses, etc. etc.

Well, I read the Complaint. This lawsuit isn’t about that at all; it’s a far more simple and straightforward case about photography on rental listings.

I am going to have to see what Zillow files in its Answer, but… oh my… based on the Complaint, based on the evidence provided, and based on straightforward application of copyright law… Zillow might be in deep trouble.

CoStar did this before against LoopNet and Xceligent, competing portals in the commercial real estate space. They know how to run this playbook and do it successfully. Looks like CoStar will run the same playbook against Zillow, and… it isn’t clear what Zillow can say in its defense. The Answer will be very enlightening indeed.

I understand this is entirely one-sided, as all I have to go by is the Complaint itself. But let’s get into it because there are implications for the industry as a whole.

This is entertainment and education, not legal advice and I am not your lawyer. Please consult your own attorney for actual legal advice.