On the Compass v. Zillow Preliminary Injunction Ruling

I will assume that you, the most informed audience in real estate, are aware of the ruling issued today by the court denying Compass’s motion for a preliminary injunction against Zillow over ZLAS.

This is quite a big deal. In fact, in past posts and podcasts, I have said that how the PI comes out could/would be determinative for both Compass and Zillow. If Compass wins, then PLNs proliferate out of control, and Zillow has an existential crisis. If Zillow wins, then Compass finds its 3PM value proposition eroded, its agents looking for the exit, and spirals downwards. In particular, after the acquisition announcement, losing the PI could have meant that the Anywhere acquisition fails to close.

My high-level initial reaction is that the ruling is a total win for Zillow legally, but that it does not spell doom for Compass. Because Compass managed to get the acquisition of Anywhere closed and done.

It isn’t good news for Compass by any stretch of the imagination; it just isn’t the death sentence it could have been. The battle now moves to the MLS, to competitors, to inter-portal competition, and so on. The outcome there is not decided, though the outcome in the courtroom appears to be.

There are real subtle aspects here worth touching on, such as how the DOJ might view this ruling, and the impact of the “multi-homing” thing in the decision.

As always, I am doing edutainment and analysis from the industry point of view. I am not your lawyer, and none of this is legal advice. Please ask your counsel for actual legal advice.

Let’s get into it.