Compass sues California listing service over home marketing rules

Compass, the largest US residential property broker, has sued California’s biggest real estate listing service in federal court in Los Angeles.

It says the service’s rule requiring agents to add homes to a shared database within one business day unfairly restricts competition.

Agents who break the rule can face fines of up to $2,500, suspension or expulsion, according to Compass.

The dispute concerns Compass’s approach of first showing some homes to its own brokers and then listing them as “coming soon” on its website.

Compass says this phased marketing gives sellers more options and can lead to higher sale prices, while the listing service argues that Compass withholds homes from the shared database while using competitors’ listings.

The service covers 22 California counties, and websites such as Zillow rely on multiple listing service data.

The court case will test who controls access to home listings and when; the listing service had already sued Compass in New York earlier this month to defend its rules.