Feds accuse Zillow of paying rival Redfin $100 million to “stop competing”
Federal Regulators Accuse Zillow of Anti-Competitive Practices in Real Estate Market
Federal regulators have filed a lawsuit against online real estate firm Zillow, alleging that the company paid rival Redfin $100 million to stifle competition in the home rental advertising market. The Federal Trade Commission (FTC) claims that this agreement between Zillow and Redfin harms both renters and property managers by limiting options and increasing costs.
The lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, accuses Zillow and Redfin of engaging in an “unlawful agreement” that eliminates Redfin as a competitor in the market for placing home rental ads on internet listing services. These services are widely used by consumers to find rental properties.
According to the FTC, Zillow and Redfin reached an agreement in February where Redfin would cease competing in the ad market for multifamily properties for nine years and assist in transitioning its customers to Zillow. This move, the FTC alleges, violates federal antitrust laws by essentially paying off a competitor to remove them from the market.
Daniel Guarnera, director of the FTC’s Bureau of Competition, stated, “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 response to the allegations, a Zillow spokesperson defended the company’s listing agreement with Redfin, stating that it benefits both renters and property managers by expanding access to multifamily listings across various platforms. The spokesperson emphasized that the partnership is pro-competitive and pro-consumer, connecting property managers to more potential renters.
On the other hand, a spokesperson for Redfin expressed strong disagreement with the government’s claims, highlighting the benefits of the partnership with Zillow in providing access to more rental listings for Redfin.com visitors and advertising customers.
