Federal Trade Commission (FTC) Resurrects Antitrust Review of Zillow

Federal review signals seriousness of Biden Administration focus on real estate

Austin, TX – The FTC’s resurrection of review of an acquisition by Zillow may be first of many actions taken as part of President Biden’s July 9 Executive Order, which directed the FTC to address anti-competitive practices in residential real estate. Other antitrust and consumer protection issues are at the core of a lawsuit that pro-consumer real estate technology company REX brought against Zillow and the National Association of Realtors.  

The FTC review comes after U.S. Senator Mike Lee and U.S. Representative Ken Buck sent a letter in August asking for such a review. Many observers expect the antitrust subcommittees of the House and the Senate to take up real estate later this year as it expands its scope into big tech companies like Zillow with bipartisan support.

REX General Counsel Michael Toth said, “Consumers deserve better than the anticompetitive, antitrust violations of big tech behemoths like Zillow and big industry cabals like the National Association of Realtors. While the U.S. Department of Justice expands its investigation into the National Association of Realtors, it is clear the FTC will thoroughly examine Zillow’s anti-competitive behavior.”

Earlier this month, NBC News’ Top Story with Tom Llamas ran an investigative report detailing Zillow’s acquisitions such as the purchase of ShowingTime which provide the company with even greater market power to profit and pick winners and losers.

“Zillow has been given an antitrust hall pass by previous administrations as it became the digital gatekeeper to the real estate economy. A single display change by Zillow in January had the effect of burying low-commission homes and leaving consumers with fewer options. The FTC’s review of this merger may be the one thing that unites realtors, buyers, and the Biden Administration as individual realtor comments have overwhelmingly said it is a bad idea for Zillow, now a real estate broker, to control not only the home browsing, but also the home showing process,” Toth continued.

In the NBC News piece, Zillow pointed the finger squarely at the National Association of Realtors and “outdated rules required Zillow to change the way listings appear.” The National Association of Realtors pointed the finger back at Zillow saying, “how Zillow displays listings is between Zillow and each Multiple Listing Service.”

Similar to the expansive look into real estate by the FTC, the Justice Department appears to be focused on an expansive real estate antitrust investigation.

Since March 9, when REX, the pro-consumer digital platform and full-service real estate brokerage, filed a federal antitrust complaint against Zillow, Trulia, and the National Association of Realtors (NAR), the Biden Administration has taken a number of actions and a federal judge has given a green light to the REX lawsuit against Zillow.

Timeline: Recent Biden Administration and Federal Court Actions Regarding Real Estate

  • On July 1, the Department of Justice (DOJ) nixed a proposed Trump Administration settlement with NAR. The unprecedented action sided with REX’s position in a February comment letter.

  • On July 6, DOJ issued a Civil Investigative Demand (CID) to NAR as part of an antitrust investigation into “residential real estate brokerage services in metropolitan areas throughout the United States.”

  • On July 9, President Biden’s executive order directed the FTC to address real estate competition.

  • On August 10, U.S. Department of Justice files brief in the REX/Zillow-NAR Segregation Rule case “to prevent the drawing of unwarranted inferences from a now-expired 2008 consent decree” and to stop the National Association of Realtors from using “the 2008 consent decree to shield conduct.”

About the Federal Investigation into the National Association of Realtors

  • The July 6 CID signaled an expansive DOJ antitrust investigation into NAR and MLS policies, practices, and rules.

  • The CID focused on NAR’s mandatory offer of compensation to brokers. This is an existential threat to NAR.

  • The CID also targets the NAR segregation rule, with major potential implications for Zillow. REX is challenging Zillow’s adoption of the segregation rule, and the CID demonstrates a clear interest by DOJ while the federal judge in the REX case greenlighted the case for discovery.

  • On September 13, NAR challenged the US DOJ CID and made public the full scope of the July 6 CID. The full CID can be read here.