Five states sue Zillow and Redfin for alleged illegal rental advertising scheme
Attorneys general from five states filed a joint lawsuit against Zillow and Redfin on Oct. 1 for allegedly engaging in an illegal scheme to stop competition in the online housing rental market.
The lawsuit comes just a day after a similar one was filed against the real estate companies by the Federal Trade Commission.
Officials from New York, Connecticut, Virginia, Arizona and Washington claim that a February 2025 deal between the two companies resulted in Zillow paying Redfin “$100 million to shut down its apartment rental advertising business and transfer its clients to Zillow.”
“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,” the lawsuit reads. “Zillow and Redfin’s unlawful agreement eliminates competition in violation of Section 1 of the Sherman Act. Considered as an acquisition, it is unlawful under Section 7 of the Clayton Act.”
The lawsuit claims that through this agreement, the two companies violated federal antitrust laws. It also states that maintaining this agreement with harm both rental advertisers and consumers.
It also alleges that Redfin fired hundreds of employees as part of the deal to then help Zillow hire some of them.
“Zillow’s attempt to shut down its competition could drive up costs for advertisers and leave renters with fewer options when searching for a new apartment,” New York Attorney General Letitia James said in a press release announcing the lawsuit.
The lawsuit seeks a ruling that would declare Zillow and Redfin’s agreement as a violation of federal antitrust laws, an injunction to prohibit the companies from engaging in this illegal conduct and a proposed “divestiture of assets or reconstruction of businesses to restore competition.”
Both Zillow and Redfin provided the same statement for the new filing and the previous lawsuit from the FTC.
“Redfin strongly disagrees with the FTC’s allegations and is confident we will be vindicated by a court of law. 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 statement to NorthJersey.com, part of the USA TODAY Network. “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.”
A Zillow spokesperson said in an email statement that the company’s partnership with Redfin 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.”