Nineteen consumer advocacy organizations have raised significant concerns about the practices of dominant real estate platforms, urging state attorneys general to launch investigations into companies such as Zillow and Compass. In a letter to Connecticut Attorney General William Tong, the president of the National Association of Attorneys General, these groups argue that the activities of these platforms have exacerbated housing affordability issues across the United States, presenting systemic challenges that warrant closer scrutiny. The letter was backed by notable organizations including the American Economic Liberties Project and the Consumer Federation of America.
Critics point to a recent settlement involving Zillow and the Federal Trade Commission (FTC), alongside five states, concerning a $100 million deal with Redfin. This agreement required Redfin to exit the online rental listings market. Consumer groups claim that while the settlement permits Zillow to maintain critical partnerships and customer bases, Redfin faces the arduous task of rebuilding from scratch. This included obligations for Redfin to reenter the rental advertising sector within six months, create a new customer portal, and establish a comprehensive sales and marketing infrastructure.
The advocacy coalition also highlighted Zillow’s listing tactics, such as directing “Contact Agent” requests to brokers who pay referral fees, potentially bypassing listing agents. Compass is criticized for prioritizing the internal marketing of homes before making listings public, a practice viewed as limiting market transparency. The groups cite these concerns alongside findings from the National Association of Realtors’ antitrust settlement in 2024, which suggested persistent commission-fixing practices in the industry.
Consumer advocates are also calling for a multistate working group to delve deeper into these issues. The group aims to evaluate Zillow’s compliance with the settlement conditions, examine alleged mortgage-related kickback schemes, scrutinize Compass’s listing strategies, and investigate potential antitrust issues surrounding Compass’s acquisition of Anywhere.
The FTC’s lawsuit against Zillow and Redfin traces back to accusations of violating antitrust laws, particularly the Sherman and Clayton Acts, by allegedly suppressing competition in the rental-advertising market. The agreement reportedly resulted in a near-monopoly in a sector where Zillow, Redfin, and CoStar dominated over 85 percent of nationwide revenue, a critical concern for consumer advocates and antitrust authorities.
The developments have garnered widespread attention, with consumer groups emphasizing the need for rigorous enforcement of antitrust laws to ensure fair practices and foster a more competitive and transparent real estate market. For a deeper analysis, see the coverage on HousingWire, which explores the intricacies of these antitrust concerns in the housing sector.