The Federal Trade Commission (FTC) and five states sued Zillow and Redfin on Wednesday in two separate lawsuits, which argue that the companies schemed to stop competition in the online housing rental market. 

Officials from New York, Arizona, Connecticut, Washington and Virginia jointly filed the lawsuit Wednesday over a February deal in which Zillow "paid Redfin $100 million to shut down its apartment rental advertising business and transfer its clients to Zillow,” New York Attorney General Letitia James' office announced in a press 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, adding that the agreements violate federal antitrust laws and may harm renters. 

The lawsuit also claims that Redfin fired hundreds of workers 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 live," 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 searching for a new apartment."

Zillow, Redfin and Apartments.com account for roughly 85% of all market revenue, according to James' office. 

The AG lawsuit seeks an injunction to bar the two companies from continuing to scheme and proposes a possible restructuring to maintain competition. 

The FTC, meanwhile sued the companies for the same thing. Filed in the District Court for the Eastern District of Virginia, the second lawsuit similarly claims that Zillow and Redfin have previously "competed fiercely" to sell advertising space to property managers trying to rent units.

"But Zillow has no interest in continuing to compete with Redfin on the merits of its rental advertising offering," the FTC complaint reads. "Instead, on February 6, 2025, Zillow and Redfin executed an unlawful agreement to remove competition from this already highly concentrated market, starting with a $100 million payment to Redfin to exit the ILS advertising market."

As the Epoch Times notes further, under the agreement, Redfin agreed to stop selling advertising for multifamily properties, terminate all such existing contracts, and transition these ad customers to Zillow, according to the lawsuit.

“Redfin has agreed to stay out of the market for up to 9 years,” it said.

Subsequently, Redfin terminated hundreds of employees supporting this business at the company, agreeing to help Zillow hire its preferred candidates from this pool, the complaint stated. As it wound down the multifamily ad business, Redfin also handed over certain sensitive information to Zillow.

As a result, Redfin’s multifamily business ceased to exist. Going forward, the company’s websites will only act as syndicates hosting listings from Zillow, according to the lawsuit.

“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 (that is, buildings with 25 or more units),” the complaint reads.

“Zillow and Redfin’s unlawful agreement eliminates competition in violation of Section 1 of the Sherman Act. Considered as an acquisition, it is unlawful under Section 7 of the Clayton Act.

“The wholesale elimination of critical competition in this highly concentrated space will harm rental advertisers and the Americans who rely on ILSs to find their next home.”

In a statement, a Zillow spokesperson maintained that the company’s “listing syndication with Redfin benefits both renters and property managers,” adding that it had “expanded renters’ access to multifamily listings.” The Seattle-based company said the agreement was “pro-competitive and pro-consumer.”

In an emailed statement to The Epoch Times, Redfin said it “strongly disagrees” with the allegations made by the FTC and expressed confidence that the company “will be vindicated by a court of law.”

“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 clear that the existing number of Redfin advertising customers couldn’t justify the cost of maintaining our rentals sales force,” the company said.

“Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.”

The Epoch Times reached out to Zillow for comment but did not receive a response by publication time.

In the FTC statement, Daniel Guarnera, director of the agency’s Bureau of Competition, said a company paying off competitors to stop competing against it is a violation of federal antitrust laws.

“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,” he said.

“The FTC will do our part to ensure that Americans who are looking for safe, affordable rentals receive all the benefits of robust competition between internet listing services like Zillow and Redfin.”

This lawsuit is one of the latest actions federal authorities have taken against companies in the rental market.

“American greatness has always depended on free-market competition, and nowhere is competition more important than in making housing affordable again,” said U.S. Attorney General Pam Bondi. “We will continue to vigorously pursue President Trump’s pro-consumer agenda.”

The Associated Press contributed to this report.