Trust-Busting in the Digital Age: How the Sherman Act Maintains Relevance in the Zillow Lawsuit

By Alaina Babb '27

Guest Writer, Florida State University

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In the increasingly digital housing market, access to online real estate websites has become indispensable for buyers, sellers, and brokers alike. Zillow exists at the apex of this online landscape, boasting over 217 million unique monthly users and a database of roughly 160 million homes on its platform. (1) However, Zillow’s dominance has not been without contest. On June 23, 2025, the nation’s largest real estate brokerage platform Compass (2) filed a lawsuit against Zillow in the U.S. District Court for the Southern District of New York following Zillow’s implementation of a new listing access standard which asserts that “if a home seller and their real estate agent market their property off Zillow for more than one day, that Zillow… [and its affiliates] …will ban that home from being listed on their search platforms.” (3) Compass’s antitrust lawsuit calls the real estate platform’s policy “exclusionary” and asserts that Zillow is employing anticompetitive tactics to protect its monopoly. (4) This dispute raises a fundamental question under § 1 and § 2 of the Sherman Antitrust Act: Can a dominant platform use access restrictions to shape competitor behavior without crossing into unlawful monopolization?

The Sherman Antitrust Act was originally published in 1890 in response to companies of the Second Industrial Revolution in the United States, such as Standard Oil, forming trusts (defined as a business arrangement in which companies within an industry unite to control the market) to reduce competition and consequently create a monopoly. (5) Thus, the Sherman Act was passed to prohibit such trusts and increase competition by dismantling these monopolies. Compass claims that Zillow’s exclusive policy violates § 1 of the Sherman Antitrust Act, (6) which enumerates the illegality of trusts as they restrain trade and commerce. (7) The true nucleus of the statute, as bolstered and elucidated by the subsequent decisions made during America’s Progressive Era of trust busting in cases such as United States v. E. C. Knight Company (1895) and Northern Securities Co. v. United States (1904), (8) is that one company shall not infringe upon the competitive free market system, which is Compass’s allegation against Zillow. (9)

The Zillow Lawsuit is not the only time that the Sherman Act has been called upon in a case of digital platform monopolization. U.S. v. Microsoft Corporation (2001) determined that Microsoft used its Windows dominance to suppress the competing browser Netscape Navigator, citing anticompetitive design changes and contractual restrictions to be in violation of the Sherman Antitrust Act. (10) The case cites “...unlawful exclusive dealing arrangements in violation of [§ 1]”, as well as “... unlawful maintenance of a monopoly in the PC operating system … and … unlawful attempted monopolization of the internet browser market…”, both of which were found to violate § 2, (11) which focuses upon the illegality of execution of or attempt at monopolization. (12) The argument that supports Compass’s lawsuit contends that Microsoft's anticompetitive actions in the alteration of its platform mirror the restrictions of Zillow’s Multiple Listing Service (MLS). Though Zillow is not a “traditional” essential facility as Microsoft might be considered, Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP (2003) established that simply the withholding of trade can itself raise an antitrust concern. (13) Specifically, Justice Antonin Scalia’s opinion on the case asserts that “...refusal to cooperate with rivals can constitute anticompetitive conduct and violate §2 [of the Sherman Act].” (14)

Observing the lawsuit filed against Zillow from the perspective of Compass, proof of exclusionary conduct rests upon the established precedents by U.S. v. Microsoft Corporation and Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP (2003). Compass’s complaint asserted that Zillow’s MLS rule is exclusionary and anticompetitive, and forecloses rivals and harms consumers, therefore violating both § 1 (unreasonable restraint) and § 2 (monopolization) of the Sherman Act. (15) As Zillow, the preeminent real estate portal, evokes the removal of a property if it is marketed elsewhere, sellers and brokers would be penalized for engaging in off-platform retail. (16) From the plaintiff’s perspective, this can be seen as coercion through limitation of competition and establishment of a monopoly. Making a direct connection to the Microsoft case, an attempt at the monopolization of the internet browser market and restraint on free commerce violates §§ 1-2 of the Sherman Act. (17) In reference to the Verizon case, dominant corporations (which Zillow undoubtedly is) have a duty not to sabotage rivals through refusal to deal, as suppression of competition is also illegal under the 1890 statute. (18)

In response to the lawsuit and complaint issued by Compass, the plaintiff, Zillow, issued a statement in which they argued that “[hiding] listings creates a fragmented market, limits consumer choice and creates barriers to homeownership, which is bad for buyers, sellers, and the industry at large…”, claiming that their MLS restrictions and one-day ban are pro-competitive. (19) The defendant claims that the process by which Compass lists homes—what they call their “Three-Phased Marketing Strategy” (20)—is anticompetitive, as “[when] a listing is publicly marketed, it should be accessible to all buyers.” (21) Compass’s marketing strategy publishes listings in phases, making them incrementally more available to the public to build anticipation of the sale, according to Compass. (22) Furthermore, in proving that Zillow’s MLS policy violates the Sherman Act, the burden of proof is upon Compass to substantiate that anticompetitive actions taken by Zillow are at the detriment of the consumer. As established in the relatively recent case of Ohio v. American Express (2018), which again defaults to the Sherman Act, it is necessary to “distinguish between restraints with anticompetitive effect that are harmful to the consumer and restraints stimulating competition that are in the consumer’s best interest.” (23) Until Compass can prove such, which they have yet to do, their lawsuit is unfounded.

Compass v. Zillow is a unique case and will serve as a bellwether in the broader struggle to define how far a dominant digital platform may go in steering market behavior, and the outcome will act as an answer to the question posed at the start of this article in determining where the line of monopolization and reduction of competition lies against the Sherman Antitrust Act. If the court sides with Compass, it may signal a modern age of trust-busting across digital platforms that threaten the range of the free market and narrow the scope of trade. On the other hand, a victory for Zillow could reinforce that prominent corporations can invoke policies that disadvantage competitors, but not at the detriment of consumers. In either case, Compass v. Zillow will help define the modern boundaries of platform power and reshape the expectations for fair competition in increasingly digitized real estate markets.

Endnotes

1. Zillow Group, Investor Relations Stats (Zillow Group, March 31, 2025), https://investors.zillowgroup.com/investors/overview/default.aspx.

2. RealTrends Verified, Best Real Estate Brokerages in United States (2025), https://www.realtrends.com/ranking/best-real-estate-agents-united-states/brokerages-by-volume/.

3. M. Chapman, “Compass Files Lawsuit against Zillow over Home Listings Policy,” Associated Press News, June 23, 2025, https://apnews.com/article/compass-zillow-real-estate-mortgage-703ed6fe67f1dca6f9dce01c2f279a2e.

4. Ibid.

5. Sherman Antitrust Act, 15 U.S.C. §§ 1–7 (1890).

6. L. Dominguez, “Compass Faces ‘Uphill Battle’ in Zillow Lawsuit, Say Legal Experts,” RISMedia, July 10, 2025, https://www.rismedia.com/2025/07/09/compass-faces-uphill-battle-in-zillow-lawsuit-say-legal-experts.

7. Sherman Antitrust Act.

8. Ibid.

9. Dominguez, “Compass Faces ‘Uphill Battle.’”

10. United States v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001).

11. Ibid.

12. Sherman Antitrust Act.

13. Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2003).

14. Ibid.

15. Chapman, “Compass Files Lawsuit against Zillow.”

16. Ibid.

17. United States v. Microsoft.

18. Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP.

19. J. Stempel, “Compass Sues Zillow for Allegedly Stifling Competition for Home Listings,” Reuters, June 23, 2025, https://www.reuters.com/legal/litigation/compass-sues-zillow-allegedly-stifling-competition-home-listings-2025-06-23/.

20. C. Leonard, “Why the Bay Area’s Biggest Real Estate Company Is at War with Zillow,” San Francisco Chronicle, May 3, 2025, https://www.sfchronicle.com/realestate/article/compass-zillow-exclusives-20301190.php.

21. Stempel, “Compass Sues Zillow.”

22. Leonard, “Why the Bay Area’s Biggest Real Estate Company Is at War with Zillow.”

23. Ohio v. American Express Co., 585 U.S. 727 (2018).