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Behind-the-scenes look at the Zillow-Trulia-News Corp. listings battle

By February 25, 2015 One Comment

Real estate is an industry full of people who cooperate and compete with each other at all levels, sometimes uneasily. With potentially hundreds of millions of dollars in annual revenue at stake, this is especially clear among the now top two rivals for consumer traffic in the real estate space: Zillow Group and News Corp.

Both companies are embroiled in litigation filed by companies under their umbrellas — last year News Corp. subsidiary and operator Move Inc. sued Zillow after a top executive defected to Zillow. Now Zillow subsidiary Trulia is in court battling Move subsidiary ListHub, which had planned to cut off the flow of listings it aggregates to Trulia this week.

If nothing else, the lawsuits offer fascinating insights into the often-hidden workings of the online real industry’s major players.

In the latest legal skirmish, attorneys for Move charged that Zillow “effectively declared war on Move” prior to acquiring Trulia.

They say Zillow used trade secrets stolen from Move to develop its newly launched listing platform, the Zillow Data Dashboard, which Zillow is counting on to keep listings flowing directly from multiple listing services and brokerages when its agreement with ListHub expires April 7.

That’s according to a Move court filing that sought to stop Trulia from obtaining a temporary restraining order preventing ListHub from cutting off listings to A judge granted the restraining order, at least until a March 12 hearing date.

Move’s attorneys argued that shackling the company to an ongoing business relationship with Trulia “makes no sense and is transparently just an attempt by [Zillow and Trulia] to bully their smaller competitor, Move, into providing them with listings until the competing platform they developed using Move’s stolen trade secrets gets off the ground.”

Zillow Group and Move declined to comment for this story.

In its complaint against Move, Trulia said that its efforts to obtain direct feeds from brokers and MLSs have had “limited success” because Move has “aggressively sought to limit Trulia’s ability to access third-party sources of listings data and to discourage MLSs, brokers and agents from sending listings data to Trulia.”

Trulia revealed that as a condition of entering into an agreement with ListHub, Trulia was prohibited from operating its own listing syndicator unless it provided notice to Move, after which Move could terminate the agreement.

More recently, attorneys for Trulia said, Move has been “seeking to redirect feeds and provide incentives for MLSs and others to work solely with ListHub.”

Trulia facing “dramatic and sudden loss” of listings

Although Trulia has been making and will now accelerate its efforts to get listing data from sources other than Move, it will not be able to replace the listings from ListHub’s data feeds immediately, or even within many months, said Trulia President Paul Levine in a filing.

Listing data from ListHub accounts for more than 25 percent of the uniquely accounted for listings on, attorneys for Trulia noted in a separate filing. In the last nine years, Trulia has obtained 421 direct feed arrangements from franchises and brokers and 125 from individual MLSs, compared with the more than 500 MLSs feeding listings to ListHub, they said.

“The unavailability of complete listings on Trulia’s website likely will cause, and continue to cause, some of its customers to turn instead to Trulia’s competitors’ websites, including Move’s, and likely will injure, and will continue to injure, Trulia’s goodwill and reputation with its customer — who may or may not return to Trulia once it can replace the listings data that Move Sales is required to supply, whenever that may be,” Levine said.

The “dramatic and sudden loss” of listings could also hurt Trulia’s business partners, such as Realogy, Levine argued.

Attorneys for Move countered that Levine offered no foundation for his assertions.

“He does not explain how consumers would become aware of the absence of Move listings on Trulia, why this would cause them to abandon Trulia, or why Trulia could not just replace Move with its sister company Zillow’s new listing platform,” they said.

The fundamental dispute between Move and Trulia regarding the ListHub agreement is whether, when Zillow acquired Trulia, Trulia’s rights and obligations under the agreement transferred to Zillow. Move maintains that under California law, Trulia’s rights were assigned as a result of the acquisition.

Trulia disagrees, saying that it continues to operate as a separate entity. Zillow Group purchased all of Trulia’s outstanding stock, but did not acquire any of Trulia’s assets or succeed to Trulia’s rights and obligations under its contracts, the company maintains.

Zillow’s break with ListHub detailed

Zillow announced in January that it had been unable to come to terms with News Corp. over renewing its syndication agreement with ListHub, and would be seeking to obtain more listings directly from brokers and MLSs before the agreement’s expiration on April 7.

But in a court filing Friday, attorneys for Trulia said Zillow chose not to renew the agreement with ListHub “when it became apparent that ListHub was demanding anticompetitive and onerous terms aimed at securing an unfair advantage for Move at Zillow’s expense.”

Last month, ListHub published the terms it had been seeking for a new agreement with Zillow, before negotiations between the two companies ended.

The proposed terms would have allowed Zillow to publish listings on additional sites it owned in the future (Trulia, for example) and would have permitted Zillow to keep its right to refuse delayed or truncated feeds.

The terms would have allowed Zillow to continue receiving direct listing feeds from brokerage and big franchise brands, while barring the site from accepting other feeds from third-party providers, which have been the source of accuracy concerns.

Zillow would also have been barred from offering any advantage in terms of cost or display to any party that decided to send their listings directly to Zillow instead of through ListHub. That condition would negate incentives offered to brokers and MLSs to participate in the portal’s direct feed programs, Zillow Pro for Brokers and Zillow Partnership Platform.

Zillow could also not have operated a competing syndication platform — a condition that likely included its Data Dashboard.

Pricing was not included in the proposed terms, according to ListHub. “Above terms determined value exchange and level of partnership. Zillow never responded to term sheet; therefore, pricing never determined,” the syndicator said on its website.

Move and the National Association of Realtors filed a lawsuit against Zillow in March 2014 alleging breach of contract, breach of fiduciary duty and misappropriation of trade secrets.

A preliminary injunction against Zillow and one of its chief execs, Errol Samuelson, is set to lift on March 22, but a Washington state Superior Court judge has ordered an investigation into whether Zillow and Samuelson should be held in contempt for violating the injunction.

Email Andrea V. Brambila.

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