June 3, 2026 – In an ultimate rebellion against artificial intelligence in the lucrative business of dream homes and rental apartments, Zillow, the real estate data aggregator, now has fewer followers in Chicago and Illinois.
On May 20, Zillow Group Inc., a Seattle-based organization that electronically gathers and manages residential real estate listings in the Windy City and its surrounding suburbs, shockingly was frozen out of data access to approximately 43,000 properties by Midwest Real Estate Data LLC (MRED), the major local multiple listing service operator.
The action, part of what has become an escalating feud between the listing behemoth, Zillow, and brokerage firm Compass Inc., follows a federal lawsuit Zillow filed in early May claiming MRED and Compass colluded to hide some homes from buyers and harmed competition in the residential real estate market. MRED said it blocked Zillow from data because the website excludes a handful of homes previously offered in private listings.
An MLS typically requires a real estate license and membership to submit a property listing. That data is then distributed to consumer-facing sites like Zillow and Redfin, where the public can view listing photos and information about the property.
MRED said the dispute involves nine listings out of 43,000 that Zillow refused to display. However, Realtor insiders say that the average Chicago real estate broker’s frustration with Zillow runs much deeper than the beef over a mere nine “private network” listings.
This is how veteran Gold Coast broker Sara Benson, president of Benson Stanley Realty, sums up the issue: “Zillow gathers and processes electronic listing data they did not create. They syndicate the broker-originated listing data and photos, which brokers typically pay professional photographers hundreds of dollars to create.”
Then, Zillow republishes the data, and bills brokers who advertise around the listing for consumer exposure on the Zillow websites, Benson said.
So, like the corporate raider played by Richard Gere in the movie “Pretty Woman,” Zillow acquires data at a bargain price, chops it up into marketable segments, and sells off the parts for a profit. They don’t “build any ships.” Similarly, Realtor critics say Zillow really is an AI data pirate.
“Zillow gathers and processes electronic listing data they did not create. They syndicate the broker-originated listing data and photos...then republish the data, and bill brokers who advertise around the listing.”
Realtor critics ask: Does Zillow now claim they own all the data that they didn’t even create? With no opt-out provisions?
Rebecca Jensen, MRED President & CEO, said all listings should be shown, as required by its data licensing agreement.
Last year, Compass sued Zillow in the U.S. District Court for the Southern District of New York, claiming the company is using “anticompetitive tactics” with its plan to restrict certain listings. Compass argues sellers have a right to market their property however they see fit.
In March 2026, Compass dropped the New York suit after a federal judge denied its request to temporarily block Zillow from refusing to list homes that have been advertised elsewhere first.
“Chicagoland home buyers and sellers have far worse access to the housing market than they did, because their local MLS decided one mega-brokerage’s profits mattered more than their ability to achieve the American Dream,” Zillow said.
However, on May 22, the federal court handling the MRED lawsuit made clear that Zillow may not selectively exclude listings that were included in MRED’s feed, including the nine listings Zillow initially chose to withhold from display.
Zillow’s refusal to display those listings despite receiving them through MRED’s licensed feed was the conduct that ultimately resulted in MRED suspending Zillow’s feed access.
The court further ordered that Zillow may not ban listings within ZIP codes where MRED has had listings during the 12-month period between April 2025 and April 2026.
This represents a significant limitation on Zillow’s ability to selectively exclude otherwise lawful listings based on its own business preferences or proprietary display policies.
On May 21, there were nearly 5,000 Chicago homes listed on Zillow, but that number plummeted to about 1,700 a day later. Meanwhile, other listing sites such as Redfin and Realtor.com show about 5,000 to 8,000 listings in Chicago.
The core dispute remains unchanged. Zillow seeks to continue receiving the benefits of MLS listing data while reserving the right to discriminate against certain lawful listings, sellers, and brokers whose marketing strategies Zillow disfavors.
MRED’s position continues to be that participants receiving licensed MLS data must comply with the same longstanding license obligations and reasonable MLS rules that apply equally to all participants and that are designed to preserve the integrity, fairness, and value of the cooperative marketplace.
Not Zillow’s first no-no
The brouhaha with MRED is not the first time Zillow has faced high-profile legal battles over intellectual property.
In 2025, CoStar Group, a commercial real estate data company, sued Zillow for allegedly displaying 47,000 copyrighted rental property photographs without authorization and distributing them to its partners Trulia, HotPads, and StreetEasy.
“Zillow is building its rental business on stolen photos,” charged Gene Boxer, CoStar Group’s general counsel.
Zillow has admitted no wrongdoing.
Here is one example, according to a Chicago Realtor, of how Zillow‘s automated data aggregation can cause havoc for property owners. Via an automated search of public records, the aggregator allegedly scraped a private short-term rental listing for a getaway home owned by the Realtor.
“Zillow took 60 private photos and the property data, and via its ‘Zestimate’ process, erroneously listed the home for sale at $1.4 million, and for rent at $7,500 a month,” the Realtor said. Zillow then allegedly syndicated those photos and data across its partner sites.
“The property was never listed for sale, and the monthly rental prices were completely manufactured by an algorithm,” the Realtor said, calling the practice a gross invasion of privacy and private property rights. “It is an unethical business model that misleads the public and exploits a broker’s proprietary assets.”
More controversy in Seattle
Critics in Seattle also say Zillow is facing allegations of violating the Real Estate Settlement Procedures Act (RESPA) by engaging in practices such as illegal kickbacks and steering home buyers to its mortgage services, which could lead to higher costs.
Recent amended complaints in Seattle also added two claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act – a federal law originally passed to combat organized crime but now frequently used in high-stakes corporate fraud cases. The filings argue that Zillow and participating real estate brokerages constitute an illegal “enterprise” that uses deceptive digital funnels, scripted sales tactics, and undisclosed fees to keep commissions “high and inflexible.”
The Seattle filing argues that prospective home buyers who click “Contact Agent” or “Request a Tour” believe they are contacting the listing agent but are routed to a “Zillow Flex” agent instead and not informed about Zillow’s 40 percent Flex referral fees.
These claims are part of ongoing class-action lawsuits that aim to address these alleged violations and their impact on home buyers.
A new report by the Consumer Policy Center warned that consumers may not realize there can be a business arrangement behind some of those referrals. The report looked at real estate referral fees, which an agent may pay to a website, matching service, or another broker for sending them a buyer or seller.
