Two formidable plaintiffs are pursuing newly filed lawsuits against prominent online rental housing listing services in the United States. Both the U.S. Federal Trade Commission (FTC) and a coalition of five state Attorneys General accuse Zillow and Redfin of anti-competitive collusion in their Feb. 2025 agreement that Redfin would withdraw from a vast segment of the multifamily market in exchange for USD $100 million.
As a consequence of the agreement, Redfin fired about 450 employees, some of whom were subsequently hired at Zillow. The two companies framed the deal as a “partnership”, which brought about Redfin’s commitment to:
- stop competing for online advertising of available apartments in all rental buildings with 25 or more units for a nine-year period;
- end contracts with its advertisers and encourage them to migrate to Zillow; and
- serve as a host for Zillow’s listings, thus mirroring its content and services.
The FTC and Attorneys General of Arizona, Connecticut, New York, Virginia and Washington contend this will drive up marketing costs for multifamily landlords and undermine the incentive to make improvements to the online platform that could benefit the apartment seekers navigating it. Prior to the agreement, Zillow, Redfin and a third online platform, CoStar, jointly garnered about 85 per cent of the revenue generated from online rental housing advertising.
“Paying off a competitor to stop competing against you is a violation of federal antitrust laws,” says Daniel Guarnera, director of the FTC’s Bureau of Competition. “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.
The FTC and the five Attorneys Generals have filed separate suits in the U.S. District Court in Virginia, seeking to disallow the agreement. They argue it violates the U.S. Sherman Antitrust Act, which prohibits contracts, combinations or conspiracies that restrain commerce and trade, and the U.S. Clayton Antitrust Act, which prohibits mergers and acquisitions that result in substantial weakening of competition. Both plaintiffs call for competition be restored, potentially through mandated divestment.
“For years, these companies have competed fiercely to sell advertising to property managers looking to rent their available units. But Zillow has no interest in continuing to compete with Redfin on the merits of its rental advertising offering,” the complaint from the Attorneys General states. “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.
