The US Federal Trade Commission sued to block a partnership to make Zillow Group Inc. the exclusive provider of information on apartment rentals offered by Rocket Companies Inc.’s Redfin.
In a complaint filed in Virginia federal court, the FTC said the partnership would reduce the number of websites offering apartment listings, leaving consumers with fewer places to search for and driving up the price for buildings that want to advertise.
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Shares of Zillow Group Inc fell 4.2% as of 2:55 p.m. in New York while Rocket dropped 5.3%.
Under the agreement announced in February, Zillow made an upfront payment of $100 million to Redfin to help Zillow enter into advertising agreements with property managers that post listings on Redfin’s sites.
Zillow operates a number of real estate websites including Zillow Rentals, Hotpads and Trulia, while Redfin maintains Rent.com and ApartmentGuide.com. Rocket acquired Redfin earlier this year.
In 2020, the FTC blocked CoStar Group Inc. from buying the company that then maintained Rent.com and ApartmentGuide.com. The company was later acquired by Redfin.
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“Our listing syndication with Redfin benefits both renters and property managers and has expanded renters’ access to multifamily listings across multiple platforms,” a Zillow spokesperson said in a statement. “It is pro-competitive and pro-consumer by connecting property managers to more high-intent renters so they can fill their vacancies and more renters can get home.”
A spokesperson for Rocket did not immediately respond for comment.
