FTC Sues Zillow, Redfin Over Multifamily Listing Syndication Deal

The Federal Trade Commission is looking to shut the door on Zillow and Redfin’s rental listing syndication deal.

The agency alleged the two listing platforms violated antitrust laws by entering into an agreement for Zillow to be the exclusive provider of multifamily listings on Redfin and other websites under its purview, according to a lawsuit filed Tuesday in the U.S. District Court for the Eastern District of Virginia.

At the center of the suit is a $100 million deal the two companies announced in February, in which Redfin agreed to only syndicate multifamily listings from Zillow on its website, as well as its other platforms, Rent.com and ApartmentGuide.com.

The firms billed the move as a “partnership,” though the FTC in its lawsuit pushed back against that characterization. The complaint argues that by agreeing to the deal, Redfin steered its advertising customers to Zillow and vowed not to compete with the company for at least nine years.

In the complaint, the FTC argues that the agreement between the two residential listing giants stifles competition. The agency claims that with fewer competitors in the space, Zillow could be dissuaded from making improvements to its platform and could drive up the cost of advertising multifamily listings.

“Paying off a competitor to stop competing against you is a violation of federal antitrust laws,” Daniel Guarnera, Director of the FTC’s Bureau of Competition, said in a press release announcing 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.”

Zillow disputed the agency’s claims, claiming the partnership was “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,” Zillow said in a statement. “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.

Redfin said in a statement the firm “strongly disagrees with the FTC’s allegations and is confident we will be vindicated by a court of law.”

“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,” the firm added. “Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.”

Rumors that the FTC was probing Zillow and Redfin surfaced in May, when the Capitol Forum reported the agency had begun reaching out to property managers to discuss the agreement. At the time, both Zillow and federal regulators declined to confirm the investigation.

News of the syndication deal came as Redfin also announced it would let go of 450 employees in its rental division, adding to a number of rounds of layoffs at the company over the last few years.

After firing those employees, executives at Redfin “helped Zillow to hire its pick of those terminated workers,” the FTC argued in its complaint.

With its lawsuit, the FTC is seeking to end the agreement between the two companies. The agency is also considering restructuring the businesses or spinning off portions of the firms to “restore competition,” according to the press release.

Earlier this year, Redfin, led by CEO Glenn Kelman, was acquired by Rocket Companies in a deal valued at $1.75 billion.

Zillow is also the target of separate allegations that it violated antitrust laws by instituting new rules barring agents from advertising any listings once marketed as private exclusives. Compass sued the platform in June over accusations that its policies were anti-competitive. The litigation is still pending.

This article has been updated with a statement from Redfin.