Spoken Plainly: What the Zillow-MRED Hearing Is and Isn't
Part Two. Even the experts are fuzzy on what this hearing decides. Here's the clearest version I could build.
Last week in my piece Zillow Bought Me a Plane Ticket, I wrote about Errol Samuelson’s “crazy idea” to fly me out to Chicago. If you haven’t read that piece, I encourage you to start there, as everything else here follows from that invitation.
Over the past seven days, I’ve been spending every spare moment (of which there are never many) reading up on the fundamentals of this case. I read Zillow’s original complaint and practically every relevant news article I could find. I’ve also spoken with a handful of industry insiders I greatly respect on both the pro-Zillow and pro-Compass/MRED sides of the fight in an effort to get more clarity and insight. And I’ve asked enough basic legal questions this week to make any first-year law student wince.
Needless to say, I’m not a lawyer. I’m not even a trained reporter. I’m a Vancouver, WA real estate broker who happens to think critically and cannot help but publish the thoughts banging around in my head. Thanks to the wonder of being alive in the internet-age, I’m as bewildered as anyone to find there’s both an audience for and maybe even some greater usefulness to my efforts.
In my many conversations this past week — including those with several people who are deeply dialed in to this industry — it became very apparent that a lot of us are fuzzy on a basic question: what is actually being decided in that courtroom on July 1-2?
So before I board the plane, let me offer you the same runway I’ve had to build for myself. No law degree necessary.
This isn’t the trial — it’s a preliminary injunction
The first thing I got wrong was the simplest one.
Don’t laugh at me, but I assumed that when I sat down in that courtroom Wednesday, I’d be watching the case get decided — a judge pronouncing a Winner and a Loser.
But that’s not what’s happening this week.
What’s actually being worked out is narrower and more temporary in nature. That’s not to say there won’t be significant wins and losses from Zillow or Compass/MRED’s perspectives depending on how the next couple days play out. But, at this point, they are all lower-case w’s and l’s in the context of the much longer process toward a final verdict.
So what is happening?
The July 1 and 2 hearing is on a preliminary injunction — a temporary order that controls what the parties are allowed to do while the lawsuit plays out, which usually takes many months, sometimes years. It doesn’t determine who’s ultimately right. It decides what the rules are in the meantime.
Most simply: Zillow wants the judge to order MRED to keep its listing feed turned on while the rest of the case gets sorted out.
Wrapping my head around the purpose of a preliminary injunction took me longer than I care to admit, so let me lay out what it all means in terms most of us will easily understand.
Picture two neighbors fighting over a property line. One sues, claiming the other’s new wall sits three feet onto his land. Sorting that out for real — surveys, deeds, a trial — takes a year. But the wall is being poured this week. So the judge faces a narrower, more urgent question than ‘where’s the property line?’ He has to decide: do we let the wall keep going up in the meantime, or not?
To answer that, he weighs two things:
First, does the neighbor who sued seem likely to be right? Not certainly — just, on a quick look, probably.
Second, who gets hurt worse in a way money can’t fix later? Finish the wall and it turns out it was on the wrong land, and now you’re demolishing a finished wall. Pause the wall and it turns out it was fine, and the builder lost a few months. One of those is a lot harder to undo.
That property-line hearing is, more or less, this hearing. Zillow is the neighbor asking the judge to halt the wall — to make MRED keep the feed ‘on’ while the real fight gets sorted out. To win the order, Zillow has to convince the judge it’s likely to prevail eventually, and that it (or buyers and sellers) would suffer irreparable harm — harm money can’t undo later — without it.
The key word here is likely. Nobody proves anything for certain this week. The judge is making a provisional bet about who’s probably right, on a fast and partial record. Not a final ruling. The full trial still comes later, and it could still land the other way.
So, this week isn’t about ‘who wins.’ Instead, it’s answering the question, since we don’t yet know who wins, what’s the least-risky thing to do in the meantime?
Arbitration could take this out of public view
This is the aspect I’ve seen the least coverage on, and based on my conversations with those who understand this case best, it might be the most important thing in this entire piece.
MRED doesn’t just disagree with Zillow. MRED is arguing that this fight shouldn’t be in federal court at all. Their stance is that it belongs in private arbitration, behind closed doors, away from where people like me can sit in and listen. Their argument is based on a clause buried in the contracts Zillow signed to get access to their listing feed in the first place.
If the judge agrees, the majority of this case disappears from public view before the antitrust questions are ever really tested. That’s a very different outcome than “Zillow wins” or “Zillow loses.” It’s “this conversation will now happen in a room none of us has access to.”
Inasmuch as I’m trying to keep my opinion out of this, I can’t help but acknowledge that moving this fight behind closed doors would be a net-loss to our industry and the consumers we exist to serve. For all the precedent that this trial stands to set, I sincerely hope it’s resolved in full public daylight.
There are a couple of wrinkles I found genuinely fascinating regarding MRED’s arbitration clause, that based on my freshman-level understanding of the law, weaken MRED’s case. But for the sake of brevity, I’m going to sit on those details rather than bog you down with them here.
The main takeaway for now is, the decision on whether or not this case proceeds to trial or is resolved in private arbitration could come down while I’m sitting in the room. It could also sit unresolved for weeks. Either way, it’s the sleeper in the whole proceeding.
The all-important question: changed or clarified?
Strip away the procedure and the case comes down to one deceptively small question: did MRED change its rules, or clarify them?
Here’s why that’s the whole ballgame.
For years, MRED’s rules let companies receiving its feed filter listings based on “objective criteria.” By Zillow’s own account, MRED historically let a site show, say, only lakefront homes. A filter based on the type of listing was fine. Then, on the same day MRED first warned Zillow it might cut the feed, MRED (allegedly) added a new line to that rule: you may not exclude listings based on the identity of a brokerage, firm, or agent.
So the entire case reduces to a characterization. Is Zillow’s policy — which screens out homes that were first marketed privately, no matter who listed them — a permitted type-of-listing filter? Or is it an identity-based exclusion of one brokerage’s listings, which the new rule forbids?
Zillow says it’s the former, and that MRED rewrote the rule specifically to redefine Zillow’s conduct as the latter. MRED says it’s simply enforcing a neutral rule that applies to everyone, equally.
Changed or clarified. That’s the crux the entire battle hinges on.
The judge’s read on this definitional question shapes how hard Zillow’s road is. There are two speeds a court can use to judge an antitrust claim. The fast lane (per se) is for conduct so obviously anticompetitive that the court won’t even entertain excuses: prove it happened and it’s illegal. The slow lane (rule of reason) weighs the harm against any legitimate business reasons before deciding.
Zillow, obviously, wants the fast lane and argues this was a naked boycott — meaning, in Zillow’s telling, there’s no legitimate business justification for the rule change; its purpose was simply to harm a competitor.
MRED is pulling for the opposite because their justification that “we’re a neutral cooperative enforcing neutral rules” only gets heard in the slow lane.
Which lane — per se or rule of reason — the judge leans toward is a subtle tell about who he thinks is winning, and it maps directly onto change-versus-clarify interpretation. Clarified a neutral rule is the slow-lane story. Changed the rule to target a competitor is the fast-lane narrative.
What I’m paying close attention to
With the runway established, here are the questions I’ll be carrying into the room.
Can a local monopoly set national rules? This is the frontier. Zillow’s own complaint defines MRED’s market as Chicagoland — it needs MRED’s near-total local grip to make its monopoly argument work. But the listings that triggered this whole fight are in Florida, Georgia, and California. The case lives in that gap: a local MLS using local power to dictate a national portal’s behavior nationwide. Every MLS in the country watching this knows why that matters.
Is Zillow’s harm real, or self-inflicted? This may be the question that actually decides the injunction and, at least from my perspective, it’s the hardest question Zillow has to answer. MRED’s side argues Zillow’s injury is its own doing. They’d argue Zillow can have the feed, so long as they adhere to MRED’s filtering rules and display all listings accordingly. I’ll be watching how Zillow answers. From what I’ve gathered, Zillow is framing the harm as falling not only upon Zillow but on consumers — sellers whose homes vanished from the biggest portal without their knowledge, buyers blinded to the homes they had every right to see. Harm to a company’s bottom line is easy to call self-inflicted. Harm to the public is much harder to wave away. That’s the live argument. And likey the question the media will be most interested in covering.
Does “seller choice” actually hold up before the judge? I want to be fair here, because the strongest version of the other side is real: a seller can rationally prefer privacy, a controlled rollout, or certainty over maximum exposure. That’s a legitimate choice, and any honest accounting has to grant it. The harder question is whether sellers are genuinely choosing it — informed, eyes open — or being routed into it. That’s where my skepticism lives, and it’s a question about disclosure as much as antitrust.
And the arbitration question I flagged above. The most consequential thing that happens in Chicago this week might be the judge deciding this fight doesn’t belong in Chicago at all.
What this won’t settle
I’ll close with the same discipline I strive to bring to all my work: not overselling.
Even a clean Zillow win this week doesn’t end the war.
I argued in The Kingmaker that the thing that concerns me most about Compass’s strategy is that it has no single point of failure. From my viewpoint, they’re building a bloc, and a bloc survives the loss of any one member. So whatever the judge decides about this feed, in this city, the larger fight over who controls access to listings likely marches on.
That’s not to say this case isn’t massively significant in its implications and the precedent it sets for future cases. It absolutely is. But I don’t believe this case will be the final battle, either.
It’s going to be interesting — but, probably not in the way most people are expecting. And, if you’re anticipating fireworks this week, you’ll likely still need to wait until the Fourth of July.
All that said, I am grateful and eager to be in the room the next few days. Listening. Thinking. Writing. And engaging with all of you who, likewise, care deeply about this industry and the homebuyers and sellers who depend upon us.
Be sure to subscribe so you catch my thoughts as they are published. Let me know in the comments what questions you have about the hearing and I’ll do my best to keep them in mind as I take notes from the courtroom.
See you in Chicago!
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