Federal regulators are accusing online real estate firm Zillow of paying rival Redfin $100 million to discourage competition in home rental advertising, harming both renters and property managers.
In a lawsuit filed Tuesday in the U.S. District Court for the Eastern District of Virginia, the Federal Trade Commission alleged the companies struck an “unlawful agreement that eliminates Redfin as a competitor” in the market for placing home rental ads on so-called internet listing services, which the agency notes are widely used by consumers.
Zillow and Redfin, which both operate large real estate listing networks, in February agreed that Redfin would stop competing in the ad market for multifamily properties for nine years and help transition its customers to Zillow, the FTC alleged.
“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 statement. “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.”
In a statement to CBS news, a Zillow spokesperson said the company’s listing agreement with Redfin “benefits both renters and property managers and has expanded renters’ access to multifamily listings across multiple platforms.”
“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,” the spokesperson added.
A spokesperson for Redfin said the company “strongly disagrees” with the government’s allegations. “Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters,” the spokesperson said in a statement.
