Virginia AG sues Zillow, Redfin over $100M agreement not to compete

Virginia Attorney General Jason Miyares and attorneys general from Arizona, Connecticut, New York and Washington filed an antitrust lawsuit Wednesday against real estate tech companies Zillow and Redfin, arguing that the two companies entered into an unlawful $100 million agreement not to compete with one another.

According to the lawsuit, Zillow entered into an agreement in February to pay Redfin $100 million to stop competing for online multifamily housing listings, terminate its existing multifamily advertising contracts and transition its customers to Zillow. The suit alleges this “unlawful payment” violates federal antitrust law, harming renters seeking to find available units and companies seeking to advertise their properties.

Furthermore, in a separate deal, Zillow agreed to make a minimum $75 million payment in the first year for Redfin to exclusively carry Zillow’s multifamily listings on its rental search websites, according to the lawsuit.

“This agreement between Zillow and Redfin not to compete is illegal,” Miyares said in a statement. “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.”

The complaint, filed in the United States District Court for the Eastern District of Virginia, asks the court to declare the agreements illegal and restore market competition. The plaintiffs want the court to award injunctive relief, including divestiture or restructuring of the businesses.

Miyares said his office worked closely with the Federal Trade Commission in investigating the matter.

Zillow and Redfin did not immediately return requests for comment. Both companies are headquartered in Seattle.

Wednesday’s suit marks the latest in a string of lawsuits Zillow has faced this year. In June, real estate brokerage company Compass sued Zillow in the U.S. District Court for the Southern District of New York, challenging Zillow over its policy of excluding many private home listings. According to the Associated Press, Compass claims Zillow “has sought to rely on anticompetitive tactics to protect its monopoly and revenues in violation of the antitrust laws.”

And in July, Arlington County-based CoStar Group and one of its subsidiaries sued Zillow, alleging Zillow was using nearly 47,000 CoStar-copyrighted images illegally on its listings sites.