The companies’ separate statements came after five states filed an antitrust lawsuit against them Wednesday, a day after the U.S. Federal Trade Commission filed a similar complaint.
The states’ lawsuit was filed in Virginia by the attorneys general of Arizona, Connecticut, New York, Virginia and Washington, according to a Wednesday press release from the Office of the Attorney General of Virginia.
The complaint alleges that the companies unlawfully eliminated competition when they agreed in February that Zillow would pay Redfin $100 million to stop competing for multifamily housing listings, end its existing contract for those types of listings and transition its customers to Zillow, according to the release.
“Zillow paying Redfin to exit the market harms renters and property owners by taking away free market incentives to provide high-quality services that businesses and consumers rely on,” Virginia Attorney General Jason Miyares said in the release.
The FTC made similar allegations in the lawsuit it filed Tuesday (Sept. 30), adding in a press release that its complaint argues that while the companies said they had formed a partnership, they actually reduced competition.
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“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 the release.
Both press releases said that the state attorneys general and the FTC worked together to investigate this issue and that they will continue to cooperate on it.
Reached by PYMNTS, Redfin said in an emailed statement that it disagrees with the allegations and expects to be vindicated by the courts.
The company added that its partnership with Zillow provides the visitors to its website with more rental listings and its advertisers access to more potential 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. “Partnering with Zillow cut those costs and enabled us to invest in more rental-search innovations on Redfin.com, directly benefiting apartment seekers.”
A Zillow spokesperson told PYMNTS in an emailed statement that the partnership between the two companies delivers enhanced value to consumers.
“Our listing syndication with Redfin benefits both renters and property managers and has expanded renters’ access to multifamily listings across multiple platforms,” the Zillow spokesperson said. “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.”
