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Zillow Customers Steered to Paying Agents Class Action

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It has become common for a single online entity to dominate its market sector. Zillow, Inc. has come to dominate home buying, just as Google, Amazon, Facebook, Yelp, and Uber dominate their respective sectors. But the complaint for this class action claims that Zillow conceals from users that it provides certain favors to what it calls “Premier Agents” in exchange for monthly payments.

The class is all real estate brokers and real estate agents in New York, Pennsylvania, and states where Zillow conducts business.

The complaint calls attention to Zillow’s importance: Roughly 80% of homebuyers use Zillow when they begin their search for a home. 

Quoting an article on “Complex Antitrust Harm in Platform Markets” in CPI Antitrust Chronicle, the complaint alleges, that Zillow has “‘the power to tilt the real-world playing field in favor of its own favored counterparties’—‘Premier Agents’—who, unbeknownst to users, pay monthly fees to be associated with properties they have no connection to.” 

What this means, the complaint says, is that Premier Agents pay fees to Zillow and Zillow “is incentivized to re-direct inquiries made to listing agents and skew its design and interface cues to benefit Premier Agents each month so that they continue paying and [Zillow’s] stock price keeps rising.” The complaint says these practices are unfair to traditional real estate brokers and “cause consumer confusion, economic harm and deception.”

When users click through to properties via a computer, they are shown a “listing agent” and three “premier agents.” On mobile devices, the complaint says, it’s even more deceptive: When users click through, they are presented with buttons for “Call Agent” and “Message Agent,” both of which lead to Premier Agents rather than the listing agent. Also, the property page “requires several scrolls to even identify the listing agent among the multiple Premier Agents.

Even worse, the complaint says that when a consumer selects the button for a listing agent, “their information is (1) actually transmitted to [Zillow’s] employees who screen them over the phone, by text message and/or email, prior to connecting them with a Premier Agent and (2) in many instances, not even sent to the listing agent but to [Zillow’s] preferred Premier Agents.” 

Listing agents who are not Premier Agents often have only a gray blank as their profile image, making it even less likely that homebuyers will contact them rather than Premier Agents. 

The steering of homebuyers to Premier Agents rather than listing agents is a disadvantage because “Premier Agents are unable to provide the information requested because they have no connection to the property being advertised, other than having paid [Zillow] to be presented prominently next to it.” Also, “Premier Agents steer the prospective homebuyrs to properties that are better financial arrangements for them as opposed to the homebuyers…”

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