Zillow BUSTED By FTC For Unleashing Mob-Style Plot, Paying $100 Million to Bribe Redfin…

Don Corleone approves this message… 

Zillow thought it was slick. Back in February, Zillow dropped $100M on Redfin for what they called a “partnership.” Translation: “Here’s a fat check, now get the hell out of the rental ads business so we can jack the prices.”

(Source: Giphy) 

Which is why now, the Federal Trade Commission just filed suit saying exactly that. Their words, not mine: “Paying off a competitor to stop competing against you is a violation of federal antitrust laws.” In other words, Zillow channeled its inner Tony Soprano, walked right up to Redfin and said, “Nice business. Shame if someone… partnered it.” LOL. For more context, here’s how it played out: Zillow wants monopoly status over online rental listings (think Zillow, Trulia, Hotpads, Rent.com… all under one roof).

(Source: CNBC) 

So naturally, Redfin, which had been stealing market share, took the money, torched its rental ad team, and handed Zillow commercially sensitive info on its way out. Additionally, some employees got the sloppy seconds treatments as they were “rehired” at Zillow. But that was about as far as Zillow got with its monopolistic wet dream. Because now, FTC lawyers are sharpening the knives, whereas, they want the deal unwound, assets divested, and maybe a few executive egos stapled to the courthouse wall. Shares of both Zillow and Redfin’s parent Rocket tanked on the news.

Keep in mind, this isn’t the first time regulators have nuked this little playground. In 2020, the FTC already blocked CoStar from scooping up Rent.com and ApartmentGuide. And they’ve been circling the real estate cartel for years… from hammering the National Association of Realtors on commissions to grilling landlords accused of colluding on rent. Meaning, by doing this, Zillow just painted a fat target on its chest.

Live look at the FTC right now… 

But what’s even funnier is how the companies tried to spin it. Zillow says the partnership is “pro-competitive” and “pro-consumer.” Bro, you literally wrote your competitor a $100M check to stop competing. That’s like calling a back-alley shivving a “collaborative performance piece.” But alas, what does this mean for investors? Well, if you’ve ever tried renting an apartment in America, you already know: it’s hell. Fewer listing platforms means higher advertising costs, which trickle down into your $2,200 shoebox with the broken AC unit. Zillow and Redfin were betting you wouldn’t notice while they played monopoly with the rental market. The FTC just noticed.

In the end, while Zillow preaches this is about saving renters money… In reality, it’s about reminding Zillow that you can’t openly bribe your competition and expect nobody to call you on it. But hey, welcome to American housing: the game is rigged, the refs are corrupt, and the FTC only blows the whistle once every five years. So yeah… keep your eyes on this story and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.