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In
a lawsuit filed on Tuesday, the FTC alleges that this agreement
started in February — when Zillow paid Redfin $100 million. In
exchange for that and other compensation, the commission said,
Redfin agreed to end contracts with advertising partners, stop
competing ads for multifamily properties for up to nine years
and serve as a syndicator of Zillow listings on its own sites.
Redfin also fired hundreds of employees shortly after the
announcement of this plan, Tuesday's complaint notes, alleging
that the company also helped Zillow hire “its pick” of these
workers.
“Zillow paid millions of dollars to eliminate Redfin as an
independent competitor in an already concentrated advertising
market — one that’s critical for renters, property managers, and
the health of the overall U.S. housing market," Daniel Guarnera,
director of the FTC’s Bureau of Competition, said in a statement
Tuesday.
Guarnera added that Zillow and Redfin's actions were a violation
of federal antitrust laws. The Commission argues that the
companies' “unlawful scheme” maybe reduce incentives for further
competition, and could lead to higher prices and fewer choices
for multifamily rental advertising customers.
In a statement, a Zillow spokesperson maintained that its
“listing syndication with Redfin benefits both renters and
property managers” — adding that it had “expanded renters’
access to multifamily listings.” The Seattle-based company said
the agreement was “pro-competitive and pro-consumer.”
A spokesperson for Redfin, which was acquired by Detroit-based
mortgage giant Rocket Companies earlier this year, added that
the company “strongly disagrees with the FTC’s allegations” and
was confident about prevailing in court. Redfin reiterated the
Zillow partnership had given its users access to more rental
listings and advertising customers access to more renters —
noting that by the end of 2024, the company had determined that
its own number of advertising customers “couldn’t justify the
cost of maintaining our rentals sales force.”
The FTC still maintains that the agreement isn't the partnership
Redfin and Zillow say it is. The Commission, which authorized
filing Tuesday's complaint in a 3-0 vote, is seeking to get the
companies to end this deal, in addition to other relief from the
court — such as potential divestiture of assets or business
reconstruction “to restore the competition.”
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