In a mostly technical legal briefing filed last week in Virginia federal court, rivals Zillow and Redfin jointly pushed back against a lawsuit filed by the Federal Trade Commission (FTC) and five states’ attorneys general that alleges the two companies violated federal antitrust law when they struck a rental “syndication” agreement late last year, arguing the deal is pro-competitive and does not run afoul of legal restrictions on cooperation between competitors.
Filed late last year, the lawsuits (which are being consolidated) claim that Zillow effectively paid Redfin to stop competing in the rental market, and alleged the market for online rental listing is already “concentrated.”
In the latest briefing, Zillow and Redfin describe the lawsuit as “meritless,” asserting that the FTC and the states ignored pro-competitive benefits of the agreement while also misrepresenting the dynamics of online real estate listing services.
“The (lawsuits) acknowledge that renters value the ability to see more listings on their preferred platform and that the Partnership enables renters visiting Zillow’s or Redfin’s websites to see more listings on the (internet listing service) they prefer,” the companies wrote.
The original deal, which was announced almost exactly a year ago, was touted by both companies as a way to bring more exposure to rental listings by “adding…Redfin sites to the Zillow Rentals Network.” Only weeks later, Rocket announced it would be acquiring Redfin, later saying it did not have any intention of pulling out of the deal with Zillow.
Zillow is facing numerous other suits on mostly unrelated matters, recently scoring a significant win in its legal fight with Compass over private listings. Consumers who used the company’s loan service are also suing Zillow, claiming they were “steered” by Zillow-affiliated agents into mortgages with fewer options and higher rates.
Facing the FTC—which under the second Trump administration, appears more focused on rental markets in terms of antitrust enforcement—Zillow and Redfin argue that the lawsuit is ignoring what is best for consumers as it relates to their deal.
“Ignoring the Partnership’s impact on renters undermines the very purpose of the antitrust laws, which aim to protect consumers—including the renters who benefit from increased listings from the Partnership,” they wrote.
Zillow and Redfin are asking the judge overseeing the case to throw it out, saying these legal defects are “fatal.”
