On October 1, 2025, the state attorneys general for Virginia, Arizona, Connecticut, New York, and Washington sued Zillow, Inc., and Redfin Corporation, two of the country's largest online rental housing advertisers, over an agreement that the states claim eliminates competition for multifamily rental advertising between the two companies. The complaint mirrors a complaint filed on September 30 by the Federal Trade Commission.
The states' lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, alleges that Zillow and Redfin executed an unlawful agreement to remove competition from the already highly-concentrated market for online apartment advertising. Prior to the agreement, the complaint alleges, both Zillow and Redfin competed on online rental marketplaces—Internet Listing Services or "ILSs"—where consumers search for rental homes or apartments. According to the complaint, on February 6, 2025, Zillow and Redfin entered into an agreement whereby Zillow paid Redfin $100 million to stop competing, to facilitate the transition of most of its multifamily rental advertising business to Zillow, and to shut down the remainder. The complaint also alleges that Redfin fired most of its rentals salesforce, including those with key customer relationships, and agreed to help Zillow hire its pick of these employees.
The AGs allege that the agreement will result in reduced choice, higher prices, and reduced quality for multifamily rental advertising in their respective states. According to the states, the agreement constitutes an illegal restraint of trade under Section 1 of the Sherman Act, and an illegal acquisition in violation of Section 7 of the Clayton Act. The states seek an injunction providing structural relief such as "divestiture of assets, divestiture or reconstruction of businesses, and such other relief sufficient to restore the competition that would exist absent the anticompetitive conduct alleged."
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