(NewsNation) — The Federal Trade Commission is suing Zillow and Redfin, accusing the real estate companies of entering an illegal deal to suppress competition in online rental advertising.
In a news release, the FTC said Zillow paid Redfin $100 million. In exchange for that and more compensation, Redfin agreed to end contracts with advertising partners, stop competing ads for multifamily properties for up to nine years and serve as a syndicator of Zillow listings on its own sites.
Shortly after the agreement was made, Redfin fired hundreds of its employees and later helped Zillow hire its pick of the terminated employees. The FTC said this was a violation of antitrust laws and said the two companies framed the agreement as a fake partnership.
Character.AI pulls Disney characters after cease and desist letter
“Zillow paid millions of dollars to eliminate Redfin as an independent competitor in an already concentrated advertising market—one that’s critical for renters, property managers, and the health of the overall U.S. housing market,” Daniel Guarnera, director of the FTC’s Bureau of Competition, said.
The FTC argued that the companies’ “unlawful scheme” may reduce incentives for further competition and could lead to higher prices and fewer choices for multifamily rental advertising customers.
In separate statements to The Associated Press, both Zillow and Redfin maintained that the agreement was “pro-competitive and pro-consumer” and that they “strongly disagree” with the commission’s allegations.
