A battery of former aides to Texas Attorney General Ken Paxton is behind an antitrust lawsuit against Zillow.
The big picture: Zillow is now the go-to site for home searches, but Austin's REX, a tech-based real estate broker, alleges that Zillow unfairly marginalizes its listings, harming its business, homebuyers and sellers.
- Zillow officials say the suit is without merit and that they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
Why it matters: REX says its approach, which automates the work traditionally done by realtors by using data to marry sellers to potential buyers, cuts commission fees from roughly 6% to nearly 2%.
Michael Toth, former special counsel to Paxton, is general counsel for REX and has hired a bevy of former AG colleagues to work on the case.
What they're saying: What's happened on Zillow is the "digitalization of a cartel," and "the days of brazen Big Tech harm to consumers are numbered," Toth says.
The other side: Zillow officials say the company will continue to "empower real estate consumers."
- "REX voluntarily chooses to use Zillow's services to advertise their for-sale properties on Zillow for free," Zillow spokesperson Viet Shelton tells Axios.
What's next: Last month a federal judge in Seattle denied Zillow's motion to dismiss REX's antitrust and false advertising claims — allowing the case to continue.
- But the judge also turned away REX's injunction to move its listings out of the "other listings" tab.