In this articleZGRKT your favorite stocksCREATE FREE ACCOUNTRafael Henrique | Lightrocket | Getty ImagesAttorneys general from five states sued Zillow and Redfin on Wednesday, alleging the companies schemed to stop competition in the online housing rental market.The lawsuit s a similar one filed by the Federal Trade Commission on Tuesday.Officials from New York, Arizona, Connecticut, Washington and Virginia jointly filed the lawsuit Wednesday, citing a February deal between the two companies in which Zillow "paid Redfin $100 million to shut down its apartment rental advertising and transfer its clients to Zillow," New York Attorney General Letitia James' office said in a news release."This agreement is nothing more than an end run around competition that insulates Zillow from head-to-head competition on the merits with Redfin for customers advertising multifamily buildings," the lawsuit reads.The suit alleges that the agreements violate federal antitrust laws and may harm renters using the companies' resources.
It also claims that Redfin fired hundreds of employees and then worked with Zillow to rehire some of them."Millions of New Yorkers rely on online apartment listings to find an affordable and safe place to ," James said in a statement.
"Zillow's attempt to shut down its competition could drive up costs for advertisers and leave renters with fewer options when ing for a new apartment."Zillow, Redfin and CoStar, which owns Apartments.com, are the three largest players in the market and account for 85% of all market revenue, according to James' office.The AGs are seeking an injunction to bar the two companies from allegedly scheming and poses a possible restructuring of the es to maintain competition."Redfin strongly disagrees with the allegations and is confident we will be vindicated by a court of law," a spokesperson for the company said in a statement.
"Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters.
By the end of 2024, it was that the existing number of Redfin advertising customers couldn't justify the cost of maintaining our rentals sales force.
Partnering with Zillow cut those costs and enabled us to invest more in rental- innovations on Redfin.com, directly benefiting apartment seekers."A Zillow spokesperson said the company maintains that its partnership with Redfin is "-competitive and -consumer by connecting perty managers to more high-intent renters so they can fill their vacancies and more renters can get ."s of Zillow and Redfin's parent company Rocket Companies initially traded lower ing the announcement, after each losing ground on Tuesday ing the FTC's lawsuit.The FTC's complaint cites a similar alleged scheme between the two companies.
Zillow and Redfin both disagreed with those allegations and said they remained confident in their partnership.