FTC, State Cases Against Zillow-Redfin Syndication Merged

A slew of antitrust allegations against Zillow and Redfin are now operating as one case.

A U.S. District Court judge consolidated a Federal Trade Commission lawsuit and a state-led complaint against Zillow and Redfin, Real Estate News reported. The residential juggernauts are now facing one action accusing them of violating antitrust laws.

The litigation dates back to the end of September, when the FTC alleged the companies stifled competition by agreeing for Zillow to be the exclusive provider of multifamily listings on Redfin and other websites under its umbrella.

The suits center on a $100 million deal the 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 FTC complaint argued that by agreeing to the deal, Redfin steered advertising customers to Zillow and vowed not to compete with the company for at least nine years.

The FTC further alleged the agreement stifles competition and claims that with fewer competitors in the space, Zillow could be dissuaded from improving its platform and could drive up the cost of advertising multifamily listings.

The FTC is seeking to end the agreement between the two companies. The agency is also considering paths for restructuring the businesses or spinning off portions of the firms to “restore competition.”

A day after the FTC’s lawsuit, attorneys general from New York, Arizona, Connecticut, Washington and Virginia filed similar litigation, seeking an injunction to unwind the alleged scheme and floating restructuring as a remedy to restore competition.

Both companies rejected the allegations in the immediate aftermath of the lawsuits. Redfin argued the partnership was a cost-saving measure that expanded listings for consumers, while Zillow claimed the deal was “pro-competitive and pro-consumer” by better connecting landlords with renters.

The battle connects to others in the real estate industry. Last month, Zillow’s relationship with Redfin came up during testimony in a four-day preliminary injunction hearing over Compass’ request to block the so-called Zillow Ban.

— Holden Walter-Warner