Zillow reportedly paid Redfin $100 million to stop advertising multifamily rentals
FTC Accuses Zillow and Redfin of Anticompetitive Rental Deal
The Federal Trade Commission sued a pair of online rental listing platforms Tuesday, claiming Zillow paid its competitor Redfin $100 million to cease advertising multifamily rental properties in an apparent effort to stop competition.
“Paying off a competitor to stop competing against you is a violation of federal antitrust laws,” Director of the FTC’s Bureau of Competition Daniel Guarnera said in a statement. “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.”
In the lawsuit, filed in Virginia federal court, the FTC says that the deal violates the Sherman Act and the Clayton Act.
The FTC targets two separate agreements signed Feb. 6 which ordered Redfin to exit the multifamily rental advertising market and help transition as much of its business as possible to Zillow. The reported agreements require Redfin to stay away from the market for up to nine years and to convert its websites and mobile app into an exclusive syndicator of Zillow listings, making its sites a copy of the listings that appear on Zillow’s sites.
“In effect, defendants have agreed to transform Redfin from an independent and vibrant competitor that markets and sells its own ILS multifamily advertising into one of several websites that provide nothing more than a copy of Zillow’s ILS listings,” the FTC writes in its suit.
Attorney Generals from Virginia, Arizona, Connecticut, New York and Washington filed an identical lawsuit Wednesday.
“This agreement between Zillow and Redfin not to compete is illegal,” Virginia Attorney General Jason Miyares said in a press release. “Zillow paying Redfin to exit the market harms renters and property owners by taking away free market incentives to provide high-quality services that businesses and consumers rely on.”
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Zillow framed the partnership differently, arguing that it gives property managers a wider audience of renters across multiple platforms, thereby increasing exposure and generating more leads.
“Our listing syndication with Redfin benefits both renters and property managers and has expanded 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 in an email. “We remain confident in this partnership and the enhanced value it has delivered and will continue to deliver to consumers.”
The agreements reportedly also led Redfin, owned by Detroit-based homeownership platform Rocket Companies, to lay off 450 employees, according to the FTC. It claims that Redfin then collaborated with Zillow to help it hire its preferred candidates among those terminated workers.
“Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters,” a Redfin spokesperson said in an email. “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. Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.”
Along with CoStar, Zillow and Redfin dominate the internet listing services market, with Zillow claiming over 200 million people visit its websites and mobile apps every month. According to the FTC, rentals account for over 30% of housing in the United States.
Zillow already owns Rent.com and ApartmentGuide.com, and the behemoth claimed in 2024 to offer 50% more rentals than its competitors. The New York-based company stated on its website that it had 50,000 multifamily rental properties listed as of December 2024.
The FTC, which typically consists of five commissioners, now lacks any Democrat commissioners after President Donald Trump fired Alvaro Bedoya and Rebecca Kelly Slaughter in a move still being litigated. Chairman Andrew Fegruson and Commissioners Melissa Holyoak and Mark Meador all voted to authorize staff to file the lawsuit.
“The FTC will do our part to ensure that Americans who are looking for safe, affordable rentals receive all the benefits of robust competition between internet listing services like Zillow and Redfin,” Guarnera said.
Source: Courthouse News Service
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