CoStar Group (CSGP) Shares Drop 11.34% Amid Legal Dispute with Zillow Over Copyright Infringement

CoStar Group Inc. (NASDAQ: CSGP) shares fell to their lowest level since June 2025 on October 13, with an intraday decline of 0.62%. The stock has now declined for six consecutive trading days, eroding 11.34% over the period, as investor sentiment remains pressured by an ongoing legal dispute with Zillow Group. The litigation, which alleges copyright infringement over unauthorized use of CoStar’s real estate imagery, has intensified concerns about the company’s short-term prospects and intellectual property enforcement.

The lawsuit centers on CoStar’s claim that Zillow distributed over 46,000 of its copyrighted real estate images more than 250,000 times across its platform. The company seeks damages exceeding $1 billion, emphasizing its ownership of the world’s largest library of real estate photographs. The dispute emerged under syndication agreements with Realtor.com and Redfin, though no public responses from the accused parties have been disclosed. The lack of clarity has fueled market volatility, as investors weigh the potential financial and reputational risks for CoStar.

Analysts highlight the broader implications for the real estate technology sector. The case tests the enforceability of intellectual property rights in an industry reliant on data sharing. A favorable outcome could reinforce CoStar’s dominance, while an adverse ruling might undermine its content creation strategy. The lawsuit also raises questions about the sustainability of current syndication models, prompting industry-wide scrutiny of licensing agreements and data usage policies.

Investor reactions remain mixed, with recent selling pressure reflecting skepticism about CoStar’s ability to resolve the dispute quickly. The prolonged legal battle risks diverting resources from innovation amid a competitive landscape where rivals like Zillow and Redfin are advancing AI-driven platforms. While CoStar’s aggressive litigation underscores its commitment to protecting assets, the absence of immediate progress has left stakeholders uncertain about its strategic focus and long-term growth trajectory.