T
he Federal Trade Commission has filed a lawsuit against Zillow and Redfin, alleging that the two Seattle‑based real‑estate firms conspired to eliminate competition in the rental‑listing market. The complaint, filed in the U.S. District Court for the Eastern District of Virginia, claims the companies violated federal antitrust law by entering into an illegal agreement that would dismantle Redfin as a rival. Redfin, now owned by Rocket Companies, runs Rent.com, Rentals.com and ApartmentGuide.com.

    In February, Zillow and Redfin announced a $100 million deal that made Zillow the exclusive provider of multifamily rental listings on Redfin. Zillow marketed the pact as a partnership that would give renters a larger selection of apartments, but the FTC argues it was a strategy to crush competition. The lawsuit seeks to break up the agreement and may require the firms to divest assets or restructure to restore market competition.

    Both Zillow and Redfin have denied the FTC’s claims. The FTC said it worked closely with several state attorneys general during its investigation. It alleges that Zillow paid Redfin $100 million to stop selling multifamily advertising, terminate existing advertising contracts, and transition those customers to Zillow. Redfin supposedly agreed to cease competing in the multifamily advertising market for up to nine years and to act as an exclusive syndicator of Zillow listings. The FTC contends that this made Redfin’s sites effectively mirror Zillow’s listings, likely raising advertising prices and worsening terms for apartment owners. It also claims Redfin fired hundreds of employees as part of the deal and then helped Zillow hire those workers. Daniel Guarnera, director of the FTC’s Bureau of Competition, said, “Paying off a competitor to stop competing against you is a violation of federal antitrust laws. Zillow paid millions to eliminate Redfin as an independent competitor in an already concentrated advertising market that is critical for renters, property managers, and the overall U.S. housing market.”

    Zillow’s spokesperson Chrissy Roebuck defended the partnership, stating that the listing syndication benefits both renters and property managers by expanding access to multifamily listings across multiple platforms. She said the arrangement is pro‑competitive and pro‑consumer, helping property managers fill vacancies and giving renters more options.

    Redfin’s spokesperson also rejected the FTC’s allegations, asserting that the partnership has increased the number of listings available to visitors and expanded reach for advertising customers. The spokesperson noted that by the end of 2024, Redfin’s advertising customer base could no longer justify the cost of maintaining its rental sales force, and the partnership with Zillow allowed the company to cut those costs and invest more in rental‑search innovations that directly benefit apartment seekers.

    Seattle‑based real‑estate economist Matthew Gardner offered a balanced view. “The FTC thinks it’s suppressing competition, but on the other hand, you could argue it’s a pro‑competitive partnership,” he said. Gardner believes the agreement does not directly affect renters, only those who advertise to them, but he is watching how Rocket Companies, which acquired Redfin in July, will respond to the lawsuit. Both Rocket Companies’ and Zillow’s stocks fell after the FTC announced the suit. Gardner added, “I think this is something the Rocket Mortgage board will be looking at very closely.”