Court merges FTC, state cases against Zillow and Redfin
The Federal Trade Commission and five states claim a rental listings partnership formed by the two companies earlier this year violates antitrust laws.
Zillow and Redfin will have one fewer case to contend with as they counter challenges to their multifamily rental listings agreement.
On the Wednesday before the Thanksgiving holiday, U.S. District Court Judge Anthony Trenga granted a motion to consolidate the lawsuit brought by the Federal Trade Commission with a related case from attorneys general in Arizona, Connecticut, New York, Virginia and Washington state.
How we got here: The FTC filed a lawsuit against Zillow and Redfin on Sept. 30 in the Eastern District of Virginia, alleging the two companies conspired to eliminate competition in the rental listings market in violation of federal antitrust laws. A day later, five states filed a separate lawsuit laying out similar allegations.
Both cases are centered around a syndication partnership the two home search giants announced in February. Per the terms of the deal, Zillow paid Redfin $100 million to be the exclusive provider of multifamily rental listings for Redfin.com and its owned rentals sites, Rent.com and ApartmentGuide.com.
Zillow previously formed a similar partnership with Realtor.com that is not part of the FTC's case.
What the lawsuit claims: The FTC complaint states that Zillow, Redfin and CoStar (through Apartments.com) dominate the rental listing space, alleging that Zillow made the deal to quash 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," Daniel Guarnera, director of the FTC's Bureau of Competition, said in a press release after the complaint was filed.
What the search giants have said: Zillow and Redfin have pushed back against the lawsuit, claiming the deal is pro-competitive and pro-consumer.
"Our listing syndication with Redfin benefits both renters and property managers and has expanded renters' access to multifamily listings across multiple platforms," a Zillow spokesperson told Real Estate News in September.
"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 spokesperson for Redfin said at the time the lawsuit was filed. "Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers," they added.
Ties to other litigation: The Zillow-Redfin partnership was also a topic at a recent hearing in the Compass v. Zillow lawsuit over private listings. Attorneys for Compass, who allege that Zillow and Redfin conspired to block Compass listings, pointed to the rentals deal as the agreement that "gave rise to the conspiracy" between the search portals.