An anonymous whistleblower is alleging that Zillow steals listing data from agent websites in order to compare it to data scraped from realtor.com and see where its own site is falling short.
In a letter to attorneys for realtor.com operator Move Inc., a presumed Zillow employee claims knowledge of illegal actions at Zillow and points Move to specific people, documents, keywords and locations to search for evidence of those actions.
The allegations support Move’s claims of misappropriation of trade secrets in a lawsuit filed a year ago against Zillow and one of its execs, Errol Samuelson, a former Move employee. Last month, Move accused Samuelson of tipping Zillow off to confidential information that allowed Zillow to acquire Trulia and therefore obtain an unfair competitive advantage.
In addition to claiming theft of agent and realtor.com listing data, the whistleblower letter (visible at the end of this story) alleges that:
- the Zillow sales team scrapes customer lists from realtor.com to target potential advertisers;
- Zillow is running secret programs called “LSS” and “LSSv2″ around listing quality;
- Samuelson was working while under a preliminary injunction, contrary to Zillow’s claims; and,
- Zillow exec Curt Beardsley stole multiple listing service contact, listing and other databases from Move (his former employer), keeps them in the cloud and uses them in his work at Zillow.
“This whistleblower letter raises extremely serious allegations about destruction of documents, theft and misuse of databases, violations of a court injunction and other illegal behavior. We hope that Zillow takes no steps to retaliate against the whistleblower, and that no further destruction of evidence in this case occurs,” said Move spokeswoman Lexie Puckett in an emailed statement.
“We find it especially troubling that confidential industry data and agent websites may have been illegally accessed and used by Zillow for its own purposes. That is a matter of great concern to our partners in the industry.”
When asked whether the allegations were true, Zillow said this in an email statement: “Zillow has acted and will continue to act with the utmost integrity in conducting its business and in defending this litigation. This letter is unsigned and unsubstantiated with a mix of mischaracterized facts and false information.”
In court filings today, Move said it received the letter yesterday, April 9. The company, along with fellow plaintiff the National Association of Realtors, is calling for the court to grant third-party discovery in the case, saying “The defendants simply cannot be trusted to be the sole source of evidence in this case regarding their conduct.”
Move declined to comment on which third parties would be involved.
“The plaintiffs have complained for months that the defendants are systematically hiding evidence in secret non-Zillow email accounts and file-sharing services,” attorneys for Move and NAR said in the court filing.
“The defendants have denied the claims, deriding them as ‘silly’ conspiracy theories and claim they have produced everything. The whistleblower’s letter appears to confirm, however, the plaintiffs’ worst fears.”
The letter claims “Zillow illegally uses the realtor.com website to benchmark their listing count and figure out what listings are missing. They also illegally access IDX listing data from the Diverse Solutions sub company (stolen from agent websites) to compare against data scraped from realtor.com. It’s run from offshore so it can’t be traced back to Seattle.
“The program was improved after Errol arrived at Zillow and uses offshore labor to steal the data.”
The letter goes on to say that Zillow used the data to create listing quality reports that were used “to plan the assault on ListHub by determining exactly who was sending data to Zillow via ListHub via the scraping efforts and comparing to the agent IDX data used against the terms of service for that data.”
Zillow acquired Internet data exchange (IDX) website provider Diverse Solutions in November 2011, prompting at least two MLSs to discontinue their agreements with the company. One of those MLSs, California’s Santa Barbara MLS, said it cut ties with Diverse Solutions because there were concerns about misuse of its listing data.
At the time, a spokesman for Zillow’s Diverse Solutions, said, “Diverse Solutions does not share data with Zillow without MLS authorization.”
Editor’s note: This story has been updated.
Email Andrea V. Brambila.