Redfin and Zillow are facing an FTC lawsuit that accuses the real estate companies of entering what the regulator calls an illegal deal to suppress competition in online rental advertising, according to the Associated Press.
The FTC in the suit, filed Tuesday, alleges that this agreement started in February when Zillow paid Redfin $100 million.
The commission said that, in exchange for that and other 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.
The complaint also noted that Redfin fired hundreds of employees not long after the announcement of this plan and alleged that the company helped Zillow hire “its pick” of these workers.
In a statement, a Zillow spokesperson maintained that its “listing syndication with Redfin benefits both renters and property managers” — adding that it had “expanded renters’ access to multifamily listings.”
A spokesperson for Redfin added that the company “strongly disagrees with the FTC’s allegations.”
The FTC is seeking to make the companies end this deal, in addition to other relief from the court such as potential divestiture of assets or business reconstruction “to restore the competition.”
