Zillow website screenshot of house at 142 Hoover Drive, Cresskill, NJ 07626

An antitrust suit in federal court in New Jersey accuses real estate website Zillow of violating antitrust law by making deals with realtors to conceal the website's estimates of property values.

The suit says the company restrains trade by entering into agreements with certain real estate brokers concerning its “Zestimates,” which are approximations of the market value of individual homes based on publicly available data. According to the suit, Zillow provides anti-competitive benefits to so-called co-conspirator brokers by concealing Zestimates for homes they are listing, which impedes fair competition among brokers.

The plaintiff, identified in court papers only as EJ MGT LLC, is the owner of a home in Creskill, New Jersey, with Manhattan views, eight bedrooms and 10 baths, which is on the market for $7.8 million. But on Zillow's website, the selling price is shown next to the Zestimate for the property, which is $3.7 million. The Creskill home is listed with a real estate agency that has no agreement with Zillow.

The owner of the Creskill property asked a Zillow representative to remove the Zestimate figure from the company's web page showing the Creskill home, but the Zillow representative declined, explaining in an email that “there are contracts in place for some brokers to receive a certain treatment,” according to the suit.

Zillow's anti-competitive practices are troublesome because Zillow is the most popular real estate website in the world and “essentially owns the search-engine-optimization results for individual street addresses,” the suit claims. When a street address is entered into Google or Bing, the first result is generally Zillow's page for that address, the suit said.

“The allegations in the complaint reflect the broader debate over 'big data' and corporate responsibility for the collection and dissemination of public information,” said Edward Grossi of Beattie Padovano in Montvale, New Jersey, who represents the plaintiff. “While corporations may be free to gather as much publicly available information as they can, they should not be allowed to enter into agreements to present this data in a way that imposes unjustifiable anti-competitive harms on the public,” Grossi said.

According to the suit, “Zillow is disseminating misleading and inaccurate pricing information that has gained prominence because of Zillow's market power, and charging downstream participants to hide this negative information that Zillow, itself, acknowledges to be inaccurate. Further, members of the public have no way to prevent Zillow from obtaining this information, and they cannot alter its display once Zillow presents it unless they hire a broker that is party to the Zestimate agreement,” the suit claimed.

Zillow has weathered numerous legal challenges to its business model, but Grossi declined to discuss why his suit might be different.

The New Jersey suit seeks compensatory and punitive damages from Zillow. It claims violations of the Sherman Antitrust Act, the New Jersey Antitrust Act and the New Jersey Consumer Fraud Act, and brings common-law claims for product disparagement and interference with prospective economic advantage.

The suit did not name any defendants besides Zillow Group Inc. and Zillow Inc., but the plaintiff said it can be inferred that Zillow has agreements to conceal Zestimates on listings for Sotheby's International, Coldwell Banker, Century 21, The Corcoran Group and Weichert Realtors.

In 2017 the plaintiff's property was featured on Open House, a WNBC program about upscale real estate, in a segment showing J.T. Thomas, then a New York Giants linebacker, touring the house with his girlfriend, although Thomas did not buy it.

Zillow said in a statement about the EJ MGT v. Zillow Group suit, “We believe the claims in this case are without merit. The Zestimate is intended to be a starting point for determining a home's value, which is why we provide it, for free, on more than 100 million homes across the country. As a company, we always seek to create advertising products that add value for consumers and advertisers, and we intend to vigorously defend ourselves against this lawsuit.”

A Zillow spokeswoman, Emily Heffter, added that the company does not negotiate with a brokerage to remove the Zestimate from a listing entirely, but sometimes agrees to move the Zestimate to another location on the listing.