Zillow faces antitrust suit, consumer fraud claims amid housing crisis

Zillow and its subsidiaries capture 62% of real estate web traffic and average more than 221 million unique monthly users, making it a starting point for most American home buyers and renters.

The Federal Trade Commission and the attorneys general of Virginia, Arizona, Connecticut, New York and Washington sued Zillow in September 2025, alleging the company paid Redfin $100 million to exit the multifamily rental advertising market and stop competing for up to nine years. The FTC and states filed for partial summary judgment June 10, arguing the evidence warrants a ruling without a full trial. The case is set for trial Aug. 24.

Zillow denied the allegations, saying the partnership with Redfin expanded rental inventory and benefited consumers.

A federal class action filed in September 2025 alleges Zillow deceives buyers by routing them to company-affiliated agents when they click "Contact Agent" or "Request a Tour" buttons. The lawsuit alleges those agents pay Zillow up to 40% of their commissions, a fee never disclosed to buyers or sellers.

A study by Yoram Wind, a marketing professor at the University of Pennsylvania's Wharton School, found that 99.7% of respondents shown Zillow's standard interface could not correctly identify who would contact them after clicking the button.

The lawsuit also alleges Zillow required affiliated agents to steer buyers toward Zillow Home Loans or risk losing access to leads. A study funded by CoStar, a Zillow competitor, found Zillow Home Loans charged borrowers an average of $4,579 more than comparable lenders in 2024.

Two members of Congress, U.S. Reps. Jennifer McClellan and Don Beyer, both Virginia Democrats, wrote to FTC Chairman Andrew Ferguson in May urging him to examine whether existing consumer protection authorities are sufficient to address online real estate platform practices.

McClellan said the FTC had not yet responded to the letter as of Wednesday.

"We have not yet received a response from the Federal Trade Commission in response to our letter, and I remain concerned about housing affordability increasingly drifting further and further out of reach for the American people," McClellan told The Center Square.

Zillow is also suing Midwest Real Estate Data, a Chicago-area multiple listing service, and Compass in federal court in Chicago, alleging the two companies conspired to withhold listings from buyers.

Zillow launched its own exclusive pre-market listing product, Zillow Preview, in March 2026, signing exclusive deals with more than 60 brokerages.

In a court filing, CoStar argued that Zillow Preview does precisely what Zillow is suing MRED and Compass over, keeping pre-market listings off competing platforms. A federal judge denied CoStar's request to formally intervene in the case Tuesday.

Zillow disputed the comparison, arguing Zillow Preview listings are publicly visible to any buyer regardless of which brokerage they work with, while Compass listings require buyers to work with a Compass agent.

"CoStar and Compass are trying to muddy the waters by conflating pre-marketing and private marketing, hoping people won't notice," Ellie Russell, a Zillow spokeswoman, told The Center Square.

Zillow denied the class action allegations. 

"The claims in this lawsuit are false and fundamentally mischaracterize how our business operates," Russell said.

The scrutiny comes as Congress advances housing affordability legislation with bipartisan support, The Center Square reported. The Senate advanced the 21st Century ROAD to Housing Act this week, with congressional leaders hoping for a final vote by week's end.

CoStar and Rep. Beyer's office did not respond to requests for comment.

The FTC confirmed the trial date but declined further comment.