In a memorandum filed Jan. 13, defendants Zillow and Redfin are asking a federal judge to throw out the Federal Trade Commission’s (FTC) antitrust case against their $100 million partnership—and their arguments reveal potential weaknesses in how the government defined the market it’s trying to regulate.
First filed Sept. 30, 2025, the FTC alleged that Zillow and Redfin “entered into an illegal agreement to dismantle Redfin as a competitor in the ILS (internet listing service) advertising market for multifamily rental properties.”
Now the defendants are arguing that the FTC fundamentally misunderstood how the rental listing market works, and their legal arguments are forcing the government to defend its position.
In the motion to dismiss filed today, the defendants raise three primary legal challenges to the FTC’s complaint.
The two-sided market issue
The rental listing market has two distinct groups of customers—property managers who pay for advertising and renters who search for apartments. According to the defendant’s filing, the FTC’s complaint focuses almost exclusively on harm to property managers, claiming they will lose their choice of platforms and face higher prices. The government says virtually nothing about renters, the defendants argue.
The defendants point to a Supreme Court ruling which delineates that when a company operates a platform serving two distinct customer groups, regulators must account for both sides when proving harm to competition.
“Plaintiffs’ allegations of harm to advertisers rest on speculation and do not include any facts about the price or quality of Zillow’s advertising in the eight months between the announcement of the Partnership and Plaintiffs’ Complaints,” the defendants argue in their memorandum to support the motion to dismiss.
Zillow and Redfin also note that under the partnership, renters who prefer Redfin now have access to Zillow’s full inventory of listings, tens of thousands of properties not previously available to them on Redfin.
Geographic market definition inconsistency
The defendants point out that the FTC’s current lawsuit contradicts the agency’s own prior position in the same industry.
In 2020, when the FTC challenged a merger between two other national rental listing platforms, the agency defined the relevant geographic markets as “individual metropolitan areas,” not national markets.
The FTC stated in that 2020 complaint that a property management company in Tampa, Florida, “must attract renters in or around Tampa” and “would have no use for an ILS that is successful at generating leads from renters interested in living in Los Angeles.”
In this current case against Zillow and Redfin, the FTC alleges a single nationwide geographic market. The defendant’s memorandum states: “Nothing in the Complaints explains why local markets were appropriate in 2020 but are not in 2025.”
Missing market data
Zillow and Redfin’s filing highlights that the FTC’s complaint makes assertions about market concentration without providing specific data to support those claims.
According to the memorandum, the FTC never identifies the combined market share of just Zillow and Redfin—the two companies involved in the partnership. Instead, the complaint references market concentration figures that include a third competitor, CoStar, which is not a defendant in the case.
“Plaintiffs’ allegations of ‘market power’ are similarly flawed,” the memorandum states. “To support their Section 1 claims, the Complaints make passing references to market share figures that include the Defendants and CoStar, alleging that Zillow and CoStar ‘now have the vast majority of ILS rental listings across the United States’…But these allegations do not identify the combined shares for Zillow and Redfin—the two firms actually implicated by the Partnership.”
Judge Anthony J. Trenga of the U.S. District Court for the Eastern District of Virginia will decide whether to grant the motion to dismiss. A hearing regarding the motion is currently scheduled for Feb. 25.
