Analysis
Zillow and Redfin have reached a settlement with the Federal Trade Commission over their rental listings partnership, The Verge reported. The agency had challenged an arrangement under which Redfin syndicated rental inventory through Zillow rather than competing for it.
What distinguished this case is that no acquisition was involved. The FTC's theory was that a commercial agreement between two of the largest residential real estate portals removed a competitor from the multifamily advertising market, which is a more expansive posture than reviewing a merger and one that applies to partnerships across many technology categories.
“What distinguished this case is that no acquisition was involved.”
Both companies are meaningful public businesses -- Zillow founded in 2006 by Rich Barton and Lloyd Frink, Redfin founded in 2004 and now part of Rocket Companies -- and rental advertising is one of the few segments of proptech with strong, recurring revenue from property managers who have limited alternatives for reaching renters at scale.
A settlement gives both companies certainty and gives the FTC a result without litigating the theory to a decision. For anyone building a marketplace, the practical takeaway is that distribution partnerships between the two largest players in a category now carry antitrust exposure on their own, without a merger agreement anywhere in sight.