A Wave of Litigation Might Transform Real Estate Technology

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Technology develops faster than our legal system moves. Eventually, though presidents get set and regulations get penned that try to level what can be a very uneven playing field. That has been true for decades now and has caused a number of really impactful changes to technology. Back in 2000 a US District Judge concluded that it wasn’t fair for Windows (the operating system) to limit its user to only Microsoft products. The result was an order for the company to split into two. While this never happened (Microsoft appealed and eventually settled), it did result in an agreement to make it easier for Windows users to download competitors programs. These types of large scale lawsuits/DOJ investigations are happening now for many large PropTech companies and, if history repeats itself, could cause some sweeping changes to the real estate technology landscape. 

On the residential side of the industry there is an ongoing battle between now defunct brokerage REX and Zillow. This case revolves around the way that Zillow classifies non-MLS listings at “other listings” in a separate tab. REX’s complaint is that this unfairly downgrades listings that do not appear on the MLSs and is anti-competitive. The original lawsuit also included the National Association of Realtors but a judge recently dismissed the organization from the trial. Even if there was no evidence that the NAR was involved

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