The law firm of Goodrich & Reely, PLLC, serves clients throughout Montana.

Real estate website redesign sparks lawsuit

On Behalf of | May 5, 2023 | Business Law

Many companies update their websites on a semi-regular basis, just to keep things looking fresh. But sometimes there is an ulterior motive behind a website redesign.

That’s what Real Estate Exchange Inc. is arguing in a lawsuit it has filed against the real estate online giant Zillow and the National Association of Realtors.

The background

Real Estate Exchange, also known as REX, is a real estate broker that has listings in many states. The National Association of Realtors, or NAR, is a national trade group made up of real estate agents. Among other offerings, NAR operates a listing service for properties that its members are selling. Zillow runs a popular website that lists homes for sale all over the country.

In 2021, Zillow redesigned its public website.

Among other claims in its lawsuit, REX argues that, when Zillow was redesigning its website, it conspired with NAR to boost listings that were part of NAR’s member list and push REX’s listings further down on the website, making them harder for users to find. The company argues that its business was hurt by the changes.

REX claims that Zillow and NAR are engaging in unfair business practices and violating antitrust laws.

Recently, a court ruled that Zillow’s chief executive must answer questions in the case.

Protecting the business

It’s certainly unusual for a website redesign to have implications for antitrust law and spark claims of unfair competition, but this case illustrates how seemingly small changes can lead to expensive business litigation. This litigation distracts business leaders and takes a lot of their time, so that they can’t do their jobs. Even if they eventually succeed in the litigation, he end result can hurt the company’s bottom line.

This is one reason it’s so important for businesses to consult with legal professionals on a regular basis, so that they can anticipate legal problems and plan accordingly.