5 states sue Zillow, RedFin over antitrust violations

(The Hill) – Five states on Wednesday sued Zillow and Redfin, alleging that the two online apartment rental marketplaces violated federal antitrust laws and throttled competition in the market. 

Attorneys general from five states — Virginia, Washington, Arizona, Connecticut and New York — filed the joint lawsuit in the U.S. District Court for the Eastern District of Virginia, referring to the $100 million February agreement where Zillow paid Redfin “to shut down its apartment rental advertising business and transfer its clients to Zillow.”

“The practical outcome of the agreement is obvious: Redfin has terminated its existing multifamily advertising business operations and, for the duration of the agreement, has stopped competing to provide ILS advertising for multifamily properties,” the states said in the complaint, referring to internet listing services. “The wholesale elimination of critical competition in this highly concentrated space will harm rental advertisers and the Americans who rely on ILSs to find their next home.” 

The suit comes just days after the Federal Trade Commission filed a similar lawsuit accusing the two companies of quashing competition with the February agreement. 

“Zillow’s attempt to shut down its competition could drive up costs for advertisers and leave renters with fewer options when searching for a new apartment. New Yorkers are already struggling with an unaffordable housing market, and I will fight to stop this illegal deal that could make it even harder to find a home,” New York Attorney General Letitia James (D) said in a statement on Wednesday. 

About 85 percent of all market revenue of the online apartment rental advertising market consists of Zillow, Redfin and CoStar, according to James’s office. 

Redfin rejected the premise of the lawsuit and the company said it is confident “we will be vindicated” in court. 

“Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters. 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,” Redfin said in a statement to The Hill. “Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.” 

Zillow said that the company’s deal with Redfin benefits both property managers and renters, arguing it has “expanded renters’ access” to multifamily listings on 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,” a Zillow spokesperson told The Hill. “We remain confident in this partnership and the enhanced value it has delivered and will continue to deliver to consumers.”