New York — Two of the biggest names in real estate, Zillow and Redfin, are facing a lawsuit from the U.S. Federal Trade Commission (FTC). Regulators say the companies struck an illegal deal that could hurt competition in the online rental advertising market.
According to the lawsuit, the arrangement started in February when Zillow paid Redfin $100 million. In exchange, Redfin agreed to cut ties with other advertising partners, stop running ads for large rental properties for up to nine years, and post Zillow’s rental listings on its own websites.
How the Deal Affected Jobs and Competition in Rentals
The FTC also claims that Redfin laid off hundreds of workers soon after the agreement. On top of that, the complaint says Redfin even helped Zillow pick and hire some of these laid-off employees.
“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,” said Daniel Guarnera, director of the FTC’s Bureau of Competition.
He added that the deal breaks federal antitrust laws and could mean fewer choices and higher prices for property owners trying to advertise rental homes.
The $100 Million Deal That Sparked Controversy
Zillow defended the deal, saying it benefits both renters and property managers by offering more access to listings. “The agreement is pro-competitive and pro-consumer,” a Zillow spokesperson said.
Redfin, now owned by Rocket Companies, also denied the claims. The company said it “strongly disagrees” with the FTC’s lawsuit and believes it will win in court. Redfin argued the partnership gave users more rental options and gave advertisers access to a wider audience.
By late 2024, Redfin admitted it no longer had enough rental ad customers to justify keeping its own sales team.
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The writer is a real estate journalist specializing in all types of New York City properties, including luxury residences, commercial spaces, and homes.
He also writes humorous articles about real estate, investors, and realtors.
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