Zillow settles FTC claims it paid Redfin to stop competing on apartment listings

On August 24, the U.S. Federal Trade Commission (FTC) and five states concluded their lawsuit against Zillow regarding allegations of illegally paying Redfin $100 million to halt competition in apartment rental listings. The FTC and states contended that the Zillow-Redfin partnership inflated costs for landlords and reduced the quality of listings for renters. Over 30% of Americans reside as renters, as per census data.

Under the settlement, Redfin retains the ability to showcase Zillow ads on its websites, but must reinstate its rental advertising operations within six months. Both the FTC and the states hailed the settlement as a victory. Despite previous clashes with the Trump administration, both parties deemed the outcome favorable.

The settlement aims to restore competition in online listing platforms, a critical resource for New Yorkers seeking affordable housing. Virginia, Arizona, Connecticut, and Washington joined the FTC as plaintiffs in the case. FTC Chair Andrew Ferguson emphasized that the settlement would foster competition in rental markets, a crucial aspect of President Donald Trump's domestic housing initiatives.

Redfin's spokesperson highlighted that the settlement allows the company to maintain its partnership with Zillow until 2030 while concurrently expanding its own rental business. Michael Sherman, executive of Zillow Rentals, expressed satisfaction with the settlement, stating it empowers the company to focus on innovation for renters and property managers.

The FTC, along with the states, alleged that prior to the partnership, Zillow and Redfin were engaging in competition to list properties in buildings with over 25 units. Post-Redfin's cessation of competition, Zillow customers reportedly paid an average of 14.5% more per listing, with some property managers ceasing rental listing acquisitions. Zillow argued that the deal would increase listings on both platforms and bolster its competition against market leader CoStar Group.