The attorneys general of Arizona, Connecticut New York, Virginia, and Washington are following the lead of the Federal Trade Commission (FTC) in suing Zillow (NASDAQ: Z, ZG) and the Rocket Companies (NYSE: RKT) division Redfin over their $100 million rental housing agreement.
Yesterday, the FTC sued the companies over an agreement from last February where Redfin agreed to withdraw as a competitor in the online listings market for multifamily rental properties in exchange for a $100 million payment and other compensation from Zillow. The FTC noted that that companies presented this agreement as a “partnership” when it removed Redfin as direct competition for Zillow.
The new complaint accused the companies of violating Section 1 of the Sherman Act, 15 U.S.C. § 1 (illegal agreement in restraint of trade) and Section 7 of the Clayton Act, 15 U.S.C. § 18 (illegal acquisition that substantially lessens competition). The complaint alleged that the agreement significant reduced competition in the online listings market for rental housing and could easily lead to an increase in higher rents and transaction fees for renters.
“This agreement between Zillow and Redfin not to compete is illegal,” said Virginia Attorney General Jason Miyares. “Zillow paying Redfin to exit the market harms renters and property owners by taking away free market incentives to provide high-quality services that businesses and consumers rely on. My office is suing to protect Virginians from this anticompetitive conduct.”
“Arizonans are already facing an astronomical cost of living – and now these massive companies want to create an unfair advantage in the market which will allow them to skyrocket costs for landlords, who will use it as an excuse to charge even more money for rent,” added Arizona Attorney General Kris Mayes. “We can’t just sit by and allow costs to go up and up and up. I’m proud to join four other states to stop Zillow and Redfin’s anticompetitive agreement. We have strong antitrust laws that allow us to protective our competitive, free, and fair economy, and we need to enforce them.”
This Zillow/Redfin pay-to-sit-down deal is like two rival pizza places agreeing not to compete, just so they can both charge $25 for a slice. Partnership? Please! Sounds more like a backroom deal to boost prices while renters watch helplessly. Good on those Attorneys General for calling them out. Cant have corporations playing checkers with our wallets, especially when rent is already a high-stakes game. Time to enforce those antitrust laws before the market turns into a pay-to-play circus.Grow a Garden calculator value to weight
My opinion is that this aspect of the housing industry is certainly not the only area where Zillow should. be investigated!
My thoughts exactly!
Spot on Thomas!
It seems we can trust Zillow Zilch…..