A Zillow (ZG, Z) policy banning certain home listings from its platform can stay in place for now, a federal judge ruled, handing the listings giant a preliminary victory amid ongoing litigation with brokerage behemoth Compass (COMP).

Compass, the country’s largest brokerage, sued Zillow over the policy, which bans home listings previously shown only to select buyers. Compass’ business relies on those so-called private listings. It sued Zillow in June, arguing the policy was anticompetitive, and sought to block it while the lawsuit proceeded.

Friday’s decision follows a four-day hearing held in New York federal court last November. Zillow argued that Compass was seeking to hold back inventory to create its own private listings network, which would fragment the market and harm consumers’ access to homes for sale.

In a ruling Friday, District Judge Jeannette Vargas said Compass failed to show that Zillow had engaged in anticompetitive behavior when it communicated with rival Redfin about the policy or that it had monopoly power over the home search market.

“Today’s ruling is a clear victory not just for Zillow, but for consumers, agents, brokerages and the real estate industry at large,” a representative for Zillow said in a statement, calling Compass’ lawsuit “baseless.”

Read more: Want to buy a house in the first half of 2026? Follow these crucial steps.

Compass’ lawsuit is part of an escalating battle about how homes are marketed, bought, and sold in the US.

“Today’s decision is not a loss, and our lawsuit continues forward,” Compass CEO Robert Reffkin said in a statement. “In Zillow’s internal strategy document, Zillow said Zillow will ‘punish the agent for choosing to put their listings on alternative networks.’ With agents being our clients, we have an obligation to protect our agents from Zillow, which explicitly stated they are trying to ‘punish the agent.’”

Compass, now the world’s largest brokerage after it acquired rival Anywhere Real Estate earlier this year, touts its private listings network as a way buyers can win first-look access to listings in hot markets and sellers can test pricing strategies before broadly listing their properties on multiple-listing services.

In late 2019, the National Association of Realtors adopted rules designed to limit what’s known as “pocket” or “shadow” listings by requiring listings to be broadly distributed on the multiple listing service (MLS) within 24 hours of starting marketing. But earlier this year, the NAR loosened the rule, allowing individual MLSs to set rules for sellers who want to delay the broad marketing of their homes.

Read more: How are the NAR's new real estate rules affecting buyers and sellers?

Weeks later, Zillow said it would ban properties that had been privately marketed from ever appearing on its platform. Other listings aggregators like Redfin also followed suit.

The decision is a blow to Compass’ “Three-Phased Marketing” approach, in which homes start as exclusive to Compass agents, are marketed as “Coming Soon” on Compass’ website, and are eventually posted on multiple listing services and featured on listings websites.

Both companies argue that they have consumers’ best interests at heart: Compass says its strategy allows sellers to test wish-list prices without potentially damaging data like days on market and price cut information, while Zillow argues that its policy promotes transparency and helps sellers get the highest possible price by putting their properties in front of the broadest group of potential buyers.

November’s hearing included testimony from both Reffkin and Zillow CEO Jeremy Wacksman.

In his testimony, Reffkin said the Zillow rule took away agents’ choice and led to them “being intimidated” and “bullied.” Wacksman, meanwhile, said the company conducted research with sellers and agents that suggested sellers prefer broad marketing over the private listing network option.

“Broadly marketing your home is a very strong benefit,” Wacksman said, adding that “as soon as you give someone that choice, they're going to choose the bigger benefit.”

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.

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