Dive Brief:
- Earlier this week, the Federal Trade Commission sued Zillow and Redfin over what it says is an unlawful agreement that eliminated Redfin as a competitor in the market for placing advertising of rental housing on internet listing services, according to a news release.
- In the complaint filed Sept. 30 in the U.S. District Court for the Eastern District of Virginia, the FTC alleges that in February 2025, Zillow paid Redfin $100 million as part of an agreement that would eliminate Redfin as a competitor in the ILS advertising market for multifamily properties. The agency also claimed the acquisition was in violation of Section 7 of the Clayton Act.
- Yesterday, the attorneys general of Washington, Arizona, Connecticut, New York and Virginia also filed a complaint in the U.S. District Court for the Eastern District of Virginia that similarly argues that the companies violated the Sherman Act by unlawfully agreeing to eliminate competition and engaged in an unlawful acquisition.
Dive Insight:
Zillow and Redfin Corp. operate two of the nation’s three largest rental ILS networks by traffic and revenue, including sites such as Zillow Rentals, Rent.com and ApartmentGuide.com, according to the complaint.
When the two companies entered into their agreement in February, Redfin agreed to end its contracts with advertising customers and help Zillow take over that business; stop competing in the market for multifamily properties for up to nine years; and serve as the exclusive syndicator of Zillow listings.
“This agreement is nothing more than an end run around competition that insulates Zillow from head-to-head competition on the merits with Redfin for customers advertising multifamily buildings,” the FTC said in the complaint.
While Zillow and Redfin referred to their agreement as a “partnership,” it effectively insulated Zillow from competing with Redfin, according to the complaint. In connection with the agreement, Redfin fired hundreds of employees, then helped Zillow to hire its pick of those terminated workers.
The agreement, the FTC alleges, harms property operators and renters by likely leading to higher prices and worse terms for multifamily unit advertising and reducing incentives for Zillow and Redfin to compete for renters.
“The wholesale elimination of critical competition in this highly concentrated space will harm rental advertisers and the Americans who rely on ILSs to find their next home,” the complaint said.
In emailed comments to Multifamily Dive, Zillow said that its ILS with Redfin “benefits both renters and property managers” and expands renters’ access to multifamily listings across multiple platforms.
“It is pro-competitive and pro-consumer by connecting property managers to more high-intent renters so they can fill their vacancies and more renters can get home,” a Zillow spokesperson said. “We remain confident in this partnership and the enhanced value it has delivered and will continue to deliver to consumers."
In a statement provided to Multifamily Dive, Redfin said it disagreed with the allegations and was confident that it would be vindicated by a court of law. It also said that the Zillow partnership provided Redfin.com visitors with access to more rental listings and its advertising customers with access to more renters.
“By the end of 2024, it was clear that the existing number of Redfin advertising customers couldn’t justify the cost of maintaining our rentals sales force,” a Redfin spokesperson told Multifamily Dive in emailed comments. “Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.”
The FTC wants to stop Zillow and Redfin from continuing what it calls their unlawful agreement. It also suggests a potential divestiture of assets or the reconstruction of businesses to restore competition.
The commission’s vote to authorize staff to file a complaint was 3-0. It issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the commission that a proceeding is in the public interest, according to the press release.
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