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Attorney generals of five states sued Zillow On Wednesday, Redfin insists on companies that planned to stop competition in the online home rental market.
The lawsuit follows a similar lawsuit filed Tuesday by the Federal Trade Commission.
Officials in New York, Arizona, Connecticut, Washington and Virginia filed a lawsuit Wednesday, with Zillow “paying Redfin for $100 million, closing down the rental ad business for apartments and transferring it to Zillow,” New York Attorney General Letitia James’ Office cited a deal between the two companies that he transferred to Zillow in a news release.
“The deal is nothing more than a competition in which Zillow isolates Zillow from direct competition on benefits with Redfin for customers promoting multi-family buildings,” the lawsuit reads.
The lawsuit argues that the agreement violates federal antitrust laws and could use corporate resources to harm tenants. It also claims that Redfin has fired hundreds of employees and worked with Zillow to rehire some of them.
“Millions of New Yorkers rely on online apartment lists to find affordable and safe places to live,” James said in a statement. “Attempting to shut down Zillow’s competition will increase costs for advertisers, leaving tenants with fewer options when looking for a new apartment.”
According to James’ office, Zillow, Redfin and Costar, which own Apartments.com, are the three biggest players in the market, accounting for 85% of the total market revenue.
The AGS is seeking an injunction to prohibit both companies from planning, and suggesting the possibility of restructuring the company to maintain competition.
“Redfin strongly opposes the allegations and is confident that it will be proven by the court,” a company spokesperson said in a statement. “The partnership with Zillow allowed Redfin.com visitors to more rental listings and advertising customers to access more rental sales. By the end of 2024, it was clear that existing numbers of Redfin advertising customers could not justify the cost of maintaining rental sales.
A Zillow spokesperson said the company claims its partnership with Redfin is a competitive and pro-consumer, “by connecting property managers to higher purpose tenants, filling the vacancy and allowing more tenants to return home.
Zillow and Redfin’s parent company stock Rocket Company Each lost ground on Tuesday following the FTC lawsuit, and initially traded low after the announcement.
The FTC complaint cites a similar allegation scheme between the two companies. Zillow and Redfin both opposed these allegations and said they were confident in their partnership.
