Zillow exec warns MLS industry faces regulatory risk if it hides data

Samuelson cited economist Elinor Ostrom's work, suggesting that such situations require either universal cooperation or government intervention. He expressed concern that the industry is nearing this point, referencing the House Judiciary subcommittee's scrutiny of Compass International Holdings and Midwest Real Estate Data (MRED) regarding their private listing network partnership, as well as ongoing litigation.

He lauded the U.S. MLS system as "the envy of the world," attributing to it transparency, liquidity, and competition that allows consumers to view market listings easily and sellers to reach a broad buyer base. Samuelson asserted that "loud voices" are pressuring the industry to undermine this marketplace.

According to Samuelson, actions such as hiding listings or statistics like days on market and price changes chip away at the marketplace. He warned that if these changes negatively impact consumers, they will turn to legislators, increasing the likelihood of regulatory intervention. "The thing that I worry about [is that] if we continue to degrade the MLS by hiding information, those ultimate customers of yours [the consumers] are going to talk to their elected representatives," he said.

Samuelson also addressed the criticism labeling real estate portals and technology vendors as "extractors" of MLS value. He drew a parallel to appraisers, who are members of the MLS system and essential to its function, yet do not contribute listings. He argued that portals like Zillow provide a significant contribution by offering free listing exposure, estimating that in the mid-1990s, agents spent the equivalent of $11 billion on newspaper advertising for listings, a cost now largely eliminated by online portals.

Regarding artificial intelligence, Samuelson suggested that MLSs should focus on AI governance rather than blocking AI usage of their data. He noted recent MLS rule changes that either claim ownership of AI-generated data or block AI usage entirely, stating neither approach is effective. Samuelson believes that agents will find workarounds if MLSs hinder AI-driven innovations that benefit consumers, and pointed to Zillow's "walled gardens" as a model for preventing MLS data from flowing to large language model providers. He urged MLS executives to be thoughtful about AI guardrails, emphasizing that the majority of members want the MLS to function cooperatively, despite current "noise."