Real estate listings giants Zillow and Redfin are urging a federal judge to throw out an antitrust lawsuit targeting their $100 million rentals partnership, arguing that the government is relying on a fundamentally flawed understanding of the digital real estate market.
In a court filing submitted late last week, the companies argue that the complaint filed by the Federal Trade Commission (FTC) in September, which seeks to block their rental listings partnership, should be dismissed because the agency failed to properly define the complex, two-sided market of renters and advertisers.
The defendants claim the FTC’s complaint ignores the “commercial realities” of internet listing services (ILS), where benefits to renters — specifically, access to more listings — create a “feedback loop” that must be weighed against any alleged effects on advertisers.
The motion to dismiss comes as discovery in the case accelerates, with hundreds of thousands of documents already produced regarding the companies’ controversial agreement.
The legal battle stems from a Feb. 6, 2025, agreement between the two companies, in which Zillow agreed to pay Redfin $100 million as part of a rental listings partnership. The FTC sued to block the deal in September, alleging the deal was an unlawful “end run around competition” designed to eliminate Redfin as a rival in the multifamily advertising market.
According to the FTC complaint, Redfin agreed to stop selling advertising to multifamily properties with 25 or more units for up to nine years and instead direct those customers to Zillow. Soon after, five states joined the FTC’s suit against the companies, alleging the partnership would lead to higher rents for consumers.
Rocket Companies, the parent company of Rocket Mortgage, one of the nation’s largest mortgage lenders, acquired Redfin in a $1.75 billion deal last July.
In their reply memorandum supporting the motion to dismiss, filed Feb. 12, Zillow and Redfin argue that the FTC is attempting to take a “shortcut” by applying a “quick look” antitrust standard rather than a full rule-of-reason analysis. The companies assert that the partnership has “plausible net procompetitive effects,” such as expanding the number of listings available to renters on Redfin’s platform, which had previously lagged behind competitors.
The defendants’ legal team argues that the plaintiff’s complaint concedes “the commercial realities: listing services deliver value to advertisers and renters at the same time, and in an inextricably intertwined way.”
By focusing only on the advertising side of the market, the defendants contend, the FTC failed to identify harm to the market “as a whole,” which is a requirement under Supreme Court precedent for two-sided platforms — referring to companies that offer different products or services to two distinct groups of customers who simultaneously rely on the platform to interact with each another.
The FTC declined to comment for this article.
The defendants also challenged the FTC’s definition of a “nationwide” market for ILS advertising services. Citing precedent from the U.S. Court of Appeals for the Fourth Circuit, the companies argue that because demand for rental advertising is inherently local — targeting specific properties in specific areas — a nationwide market definition is improper.
Zillow and Redfin’s legal team also claims that the FTC failed to provide specific market-share data to support its claim that the companies exercise illegal market power, relying instead on “vague statements” about rental audience size.
While the legal arguments over the dismissal request play out, the litigation process is moving forward. In a joint status report filed Tuesday, the parties informed the U.S. District Court for the Eastern District of Virginia that there are currently “no areas of impasse.”
Zillow has produced approximately 240,000 custodial documents and 1,100 noncustodial documents to date, according to Tuesday’s status report, while Redfin has turned over roughly 91,000 custodial documents. Plaintiffs have begun noticing third-party depositions, and the scheduling of defendant depositions is underway.
When reached for comment, a Zillow spokesperson referred Scotsman Guide to a Feb. 13 website post, which read, in part, “We remain confident in our legal position and will continue to engage constructively with regulators.”
A hearing for the dismissal motion is scheduled for Feb. 25.
