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The dispute between Realtor.com and CoStar’s Homes.com has made its way to the courts.
Realtor.com parent Move, Inc., filed a lawsuit Tuesday in U.S. District Court in California, alleging a former Move employee now working at CoStar swiped trade secrets that fueled Homes.com’s rapid growth into an industry-leading portal.
The lawsuit marks a swift escalation in a long-running feud between the portal giants, which reached a crescendo earlier this year after Homes.com touted a major traffic benchmark in March that Realtor.com has disputed.
“There is nothing wrong with lawful – even intense – competition,” Move, Inc. wrote in its complaint. “But competitors should never be allowed to cheat and steal to get ahead.”
In its complaint, Move repeated an allegation delivered by CEO Damian Eales at the MLS Forum of the Realtors Legislative Meetings in Washington, D.C. in March, saying Homes.com’s claims of being the second largest portal after Zillow are fabricated and that Realtor.com is second in traffic and impressions.
The company has previously disputed claims by CoStar CEO Andy Florance that Homes.com is the second-most trafficked real estate portal, ahead of Redfin and Realtor.com.
Move, which is owned by the media conglomerate News Corp, acknowledged that Homes.com had grown to become a “significant player” in the real estate portal sector, though stopped short of conceding second place. But that growth, the company insists in the complaint, was fueled in part by an employee who left Move to work at CoStar as part of a “desperate” effort to increase web traffic.
According to Move’s complaint: James Kaminsky, “a former Move employee now working for Move’s direct competitor, CoStar, systematically invaded Move’s secure computer systems, secretly exfiltrated Move’s trade secrets, and spied on Move’s real-time confidential electronic documents to give CoStar a massive unfair competitive advantage and to help CoStar increase traffic to its competing real estate listing website, all to the detriment of Move.”
A Realtor.com spokesperson declined to comment on the lawsuit. A spokesperson for CoStar Group dismissed the complaint as a distraction.
“This lawsuit is Realtor.com’s latest desperate attempt to distract from the fact that Homes.com has replaced Realtor.com as the number two portal according to the parties’ own site-centric data gathering tools,” CoStar general counsel Gene Boxer said in a statement.
Kaminsky was the former head of the News & Insights group at Realtor.com, where he worked for nine years. He is now editor at Homes.com, according to the complaint, which cites his LinkedIn profile.
In that role, Move alleged Kaminsky is overseeing a team of writers that is building a digital product that it said is similar to its own News & Insights offering, a key piece of Realtor.com’s marketing strategy.
According to Move’s complaint: “As he departed Move, Mr. Kaminsky stole confidential business information, sending it to his personal email account on the last day he had access to Move’s computer system. He established surreptitious, undetected ongoing access to allow himself (and, thus, CoStar) to spy on Move’s highly confidential documents stored on protected computer systems. Then, attempting to cover his tracks, Mr. Kaminsky deleted nearly a thousand files from his Move computer and wiped clean his entire browsing history before returning the device to Move.”
Move alleged Kaminsky accessed information from Realtor.com “at least 37 times after CoStar hired him,” violating federal and state computer fraud laws in the process.
According to Move, those documents included information about topics and content planned for Realtor.com; ideas for future stories; metrics showing user traffic; a list of contacts; lists of Realtor.com employees and their compensation; and other private business information.
According to his LinkedIn profile, Kaminsky left Move in January and started with CoStar in March. Move alleged Kaminsky accessed Realtor.com documents undetected through June.
“The goal, obviously, is to help CoStar unlawfully jumpstart the creation of a ‘monetization engine’ for CoStar by driving up website visitor numbers and increasing revenue and profits for CoStar,” Move wrote in the complaint.
In his statement, CoStar’s Boxer minimized Kaminsky’s role at the company, calling the employee a “mid-level manager who writes and edits stories about condos.”
“Safe to say he has zero input into Homes.com’s strategy. And even Move’s creative writing exercise doesn’t pretend that CoStar itself engaged in any misconduct,” Boxer said. “This is a PR stunt that is already backfiring. Realtor.com is losing the battle with Homes.com and its attempt to change the story doesn’t change that reality. We look forward to prevailing in court.”
Move called web traffic the “lifeblood” for real estate portals, as consumers want to use the most popular platform and real estate professionals want to advertise where consumers are searching.
The lawsuit puts a spotlight on the ongoing feud that started when CoStar announced in October that it had taken the No. 2 spot in web traffic among the major real estate portals.
In February, CoStar rolled out a $1 billion advertising campaign aimed at boosting traffic to Homes.com.
Realtor.com has repeatedly and publicly disputed the claim, including in the lawsuit.
“According to every independent third-party source Move can identify — such as Comscore, Nielsen, Similar Web, or SEM Rush — Realtor.com has for years been the second most-visited residential real estate listings website in the United States, behind Zillow and ahead of Redfin,” Move wrote in the complaint. “By every independent third-party measure, Homes.com is last among the top four. “
Move is seeking unspecified damages at a jury trial.
Read the full complaint here.
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