T
he Ninth Circuit Court of Appeals has upheld a ruling in favor of Zillow and the National Association of Realtors (NAR) against Real Estate Exchange (REX), a low-fee brokerage. REX had filed a lawsuit four years ago alleging that NAR's no-commingling rule was an anticompetitive scheme, but the appeals court disagreed.

    The no-commingling rule requires MLS listings to be displayed separately from non-MLS listings. REX argued that this rule harmed its business because its non-MLS listings were relegated to a separate search results tab on Zillow's website, significantly reducing traffic to those listings. However, the Ninth Circuit found that each MLS chose whether to adopt the rule and nearly a third did not, indicating it was optional.

    The court also ruled that Zillow had independently redesigned its website to comply with the no-commingling rule, and REX failed to provide evidence that NAR agreed or was involved in the redesign. As a result, the appeals court upheld the district court's decision to instruct the jury about Zillow's business practice, which REX alleged was wrong.

    NAR and Zillow welcomed the ruling, with NAR stating that it had always maintained that the no-commingling rule did not constitute an antitrust violation. The association emphasized that the rule is optional and that 29% of MLSs chose not to adopt it. Zillow also expressed satisfaction with the decision, saying that its actions were in line with increasing transparency in real estate.

    The case began when REX sued Zillow in 2021, claiming that the search portal used deceptive practices to conceal non-MLS listings in search results. The case went to trial in September 2023 and a jury disagreed with REX's allegations, prompting the brokerage to request a new trial.