The U.S. Federal Trade Commission has reached a settlement with Zillow and Redfin to resolve claims that the companies engaged in an illegal agreement to suppress competition in online rental advertising. The proposed order, filed with the U.S. District Court for the Eastern District of Virginia, requires Redfin to restart its standalone rental housing listings business.
The FTC stated that this settlement will restore competition in the market for rental property listings and also resolves litigation brought by state attorneys general in Arizona, Connecticut, New York, Virginia, and Washington. Daniel Guarnera, director of the FTC’s Bureau of Competition, said the settlement provides better and quicker results than a trial.
Nearly a year ago, the FTC filed a complaint alleging that Redfin agreed to cease its independent rental listings and exclusively repost Zillow's listings in exchange for $100 million and other compensation from Zillow. The agreement, according to the FTC, would have required Redfin to stay out of the apartment listings market for up to nine years. The commission argued that this pact violated federal antitrust laws and could lead to higher prices and fewer choices for customers seeking multifamily rental advertising.
Zillow and Redfin had maintained that their agreement was not anticompetitive and benefited renters and property managers. Under the FTC’s proposed order, Redfin must relaunch its rental listings business and hire sufficient staff within six months of the order's finalization or face financial penalties. The FTC noted that Redfin had terminated hundreds of employees shortly after announcing the deal with Zillow.
While Redfin will continue to syndicate Zillow’s listings, the FTC stated it will be permitted to seek out and advertise non-Zillow listings. A Zillow spokesperson said the company "has consistently maintained the partnership with Redfin is pro-consumer and procompetitive, and we’re pleased to have found a resolution that enables its continuation." A Redfin spokesperson indicated that the agreement allows the company to maintain its rental partnership with Zillow through at least 2030 while also developing its own standalone rentals business.