Zillow sued by Homes.com owner CoStar for 'massive' copyright violations

By Jonathan Stempel

NEW YORK, July 30 (Reuters) - Zillow ZG.O was sued on Wednesday by Homes.com owner CoStar Group CSGP.O, which accused the largest U.S. online real estate portal of publishing at least 46,979 copyrighted photos without permission.

The complaint filed in Manhattan federal court seeks unspecified compensatory and punitive damages, which Arlington, Virginia-based CoStar estimated could exceed $1 billion.

CoStar, whose real estate listing websites also include Apartments.com and LoopNet.com, accused Seattle-based Zillow of exploiting the photos, many of which contain watermarks, to boost its rental listings business.

Zillow did not immediately respond to requests for comment.

According to the complaint, Zillow uses CoStar's photos to induce property managers and landlords to "claim" properties that are not actively listed for rent, and then sells advertising packages and tools to generate revenue.

CoStar said Zillow also distributes some photos under syndication agreements to rival portals Realtor.com and Redfin, owned respectively by News Corp NWSA.O and Rocket Cos RKT.N.

Zillow's "free-riding" on the photos results in infringement "on a massive scale, however measured," CoStar said.

CoStar said it provides limited licenses of its photos to real estate professionals and does not allow sublicensing.

In 2019, CoStar obtained a $500 million judgment against the bankruptcy estate of real estate listing platform Xceligent over the publication of 38,489 copyrighted photos, court records show. Xceligent had filed to liquidate two years earlier.

CoStar threatened to sue Realtor.com and Redfin if they do not remove its copyrighted photos.

Realtor.com and Redfin declined to comment. CoStar did not immediately respond to a request for additional comment.

In June, Compass COMP.N, the largest U.S. residential real estate brokerage by sales volume, sued Zillow for allegedly trying to monopolize private home listings, violating federal antitrust law. Zillow has called Compass' claims unfounded.

The case is CoStar Group Inc et al v Zillow Group Inc et al, U.S. District Court, Southern District of New York, No. 25-06248.