Zillow (Nasdaq: ZG) shares fell 4.3% on Wednesday after the Federal Trade Commission (FTC) filed an antitrust lawsuit against the company and Rocket Companies' (NYSE: RKT) subsidiary Redfin, alleging that the real estate platforms entered into an unlawful agreement to suppress competition in the online rental housing advertising market. Rocket shares fell 3% during after-hours trading.
The FTC complaint highlighted a $100 million (£74 million) agreement between the companies, executed in February, under which Redfin would terminate its contracts with advertising customers to stop competing in the advertising market for multifamily properties. The agreement also required Redfin to syndicate only Zillow rental listings, giving the latter exclusive control over multifamily rental listings on Redfin's platforms. The complaint claims Redfin also downsized its workforce by hundreds of employees after the deal, some of whom were then hired by Zillow.
