The “no-commingling rule,” an optional MLS policy crafted by the National Association of REALTORS® (NAR) in the 2000s in the wake of a Department of Justice (DOJ) investigation, is being largely abandoned by MLSs, according to a Zillow spokesperson, as the company shifts from its two-tabbed search display.
Markets that do not have a no-commingling rule now outnumber those that do, according to the spokesperson, though they declined to provide specific numbers. Likewise, an NAR spokesperson declined to answer questions on MLSs that have implemented the rule, or if NAR is considering repealing the policy.
According to the Zillow spokesperson, the portal giant—which has long criticized the rule, despite adopting and enforcing it for many years—began phasing out its multi-tab display over the last few months in markets where MLSs have not adopted (or have recently repealed) the rule, which bans the display of non-MLS listings alongside MLS listings, meaning on Zillow, most consumers are seeing both types of listings together.
The impact of a major shift in how the rule is adopted and enforced remains to be seen. Listing service startup REX, which has been embroiled in over four years of litigation against NAR and Zillow primarily over the no-commingling rule, claims that non-MLS listings are effectively hidden and suppressed by the policy.
The Zillow spokesperson said that the company hasn’t run into any major issues or concerns from MLSs, and pushed back against the idea that Zillow was trying to undermine the rule, claiming that the company is motivated to show as many listings as possible to consumers.
In court filings as part of that lawsuit, the parties—including NAR—affirmed that 71% of MLSs had adopted the no-commingling rule, though how much of the total listing market that included was not specified.
The Zillow spokesperson pointed out that many MLSs began repealing the rule after a widely reported wave of DOJ civil subpoenas went out to “industry stakeholders,” including MLSs, late last year.
But the move also broadly coincides with Zillow’s pushback against private listings and a new policy advocating for transparency and open access by consumers to listings. The Zillow spokesperson said the company sees the shift as part of ensuring consumers have access to all listings, with no change in algorithm for the new single-search.
Previously in court filings, Zillow said it had “significant discretion” in how it would initially implement the no-commingling rule, before ultimately landing on the multi-tab display. A lawyer representing Zillow in the REX case told a panel of judges for the Ninth Circuit that it could have adopted different rules for different markets, even fully excluding non-MLS listings. He added that early Zillow studies showed there “was a problem with the contrast” between MLS and non-MLS listings.
That attorney said Zillow also considered offering REX a “workaround” to pay $1 a listing to be on the main tab with MLS listings.
Notably, the Eighth Circuit just recently affirmed a district court ruling that Zillow’s implementation of the no-commingling rule did not violate antitrust laws, which NAR touted as an affirmation of the rule’s legality.
“The United States Court of Appeals for the Ninth Circuit recently affirmed a decision of the district court emphasizing what we’ve said from day one—NAR’s no-commingling rule never constituted an antitrust violation. The rule is optional, leaving MLSs the choice whether to adopt it, and, in fact, 29% of them chose not to,” the spokesperson said.
Right now, however, most searches on the portal will show all listings together, according to the Zillow spokesperson. In markets where there is a conflict—where one MLS has adopted the rule and another hasn’t—the search will default to the most “conservative” display, the Zillow spokesperson said, though exactly what that would look like isn’t clear.
Previously—both publicly and in court—Zillow characterized the implementation of the no-commingling rule on its platform as expensive and onerous as it changed search displays and website design.