Zillow gave Redfin money to stop competing on apartment listings. The FTC called this anticompetitive. Zillow called it a partnership. Both statements describe the same transaction, which tells you everything about antitrust law.
The case was set to go to trial Monday. The argument: Zillow and Redfin agreed to carve up the market. Landlords paid more. Listings got worse. Two companies that pretended to disrupt real estate decided disruption works better when you're not disrupting each other.
Zillow settled. No admission of wrongdoing. No details on the terms. Just a quiet agreement to stop doing the thing they definitely weren't doing in the first place. Classic.
Redfin's entire brand was built on being the scrappy alternative to Zillow. Then Zillow handed them a check and suddenly apartments weren't worth the effort. Imagine paying your competitor to take a nap. Now imagine the nap costs landlords more money and makes their listings look like they were written by a drunk property manager in 1997.
The FTC had emails. They had documents. They were ready to argue collusion in open court. Zillow looked at that evidence and thought, "You know what? Let's not."
Retail traders loved both these stocks for years. Disruptors. Innovators. The future of real estate. Turned out the future of real estate was two companies splitting the market like mob bosses dividing up Brooklyn. Except mob bosses don't issue press releases about strategic partnerships.
The settlement means landlords who got f*cked on listing fees will continue to get f*cked on listing fees, just with slightly different paperwork. Zillow walks away. Redfin walks away. The FTC gets to say they did something. Everyone wins except the people who actually list apartments, but those people were never part of the innovation story anyway.
If you owned either stock because you believed in the mission, the mission was stopping competition and charging more for less.
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