CoStar Group (CSGP) Shares Dive 4.30% as Legal Dispute with Zillow Over Copyright Infringement Intensifies

Shares of CoStar Group (CSGP) fell 4.30% on Monday, marking a new intraday low since July 2025 with a 4.98% drop during trading hours. The decline follows a high-profile legal dispute with Zillow, a major real estate platform, which has intensified investor concerns over intellectual property risks and competitive tensions in the sector. CoStar alleges Zillow unlawfully used over 46,000 of its copyrighted real estate photos, which appeared more than 250,000 times on Zillow’s platform. The lawsuit, filed in August 2025, seeks damages exceeding $1 billion and highlights the company’s aggressive stance on protecting its extensive library of real estate imagery.

The legal battle has introduced significant uncertainty, prompting a sell-off as investors reassess CoStar’s risk profile. The company, which owns Realtor.com and operates a vast ecosystem of real estate data, faces scrutiny over its ability to balance litigation costs with long-term growth. While CoStar emphasizes its commitment to intellectual property rights, the protracted case raises questions about the financial and reputational impact of such disputes. Analysts note the timing of the lawsuit coincides with broader market volatility, amplifying concerns about the firm’s market positioning relative to peers like EPAM Systems.

Though CoStar has seen a 30% rally in 2025, the lawsuit has cast doubt on whether fundamentals justify its valuation. The case also reflects the company’s strategic focus on leveraging intellectual property to assert dominance in the real estate tech space, a move that could resonate with stakeholders valuing innovation but may deter risk-averse investors. The outcome of the litigation will likely influence investor sentiment, with a favorable ruling potentially boosting confidence or further pressuring the stock if CoStar faces adverse decisions. The broader real estate industry will also watch closely, as the case could set precedents for handling digital copyright disputes in the sector.