Letter Urges the National Association of Attorneys General to Crack Down on Anticompetitive Practices by Zillow, Compass & Others
Washington, D.C. — On Wednesday, Demand Progress Education Fund and a coalition of consumer advocacy groups sent a letter calling on the National Association of Attorneys General to implement structural fixes in the housing market. Housing affordability is one of the most urgent economic issues facing American families, and state attorneys general must step up to ensure that listing markets are fair, competitive and honest.
Last fall, the FTC and five states sued Zillow and Redfin, alleging that Zillow struck a $100 million deal with Redfin to induce it to exit the online listings market. In August, the FTC settled with Zillow and Redfin just hours before their trial was set to begin. The settlement stops short of restoring the market that existed before the deal, and allows Zillow and Redfin to move forward with an agreement that will significantly encumber market competition. Zillow commands roughly two-thirds of U.S. real estate web traffic, and its syndication partnerships with companies like Redfin further entrench its market power.
But Zillow is only one of the most visible arms of a much larger beast. The market through which Americans find, rent, and buy homes is highly concentrated. In January, the brokerage Compass completed its $1.6 billion acquisition of Anywhere, creating a single entity responsible for nearly one in five U.S. home sales. Compass markets properties inside its own network before – or instead of – exposing them to the public market, meaning sellers reach a narrower pool of buyers. And dominant listing platforms charge consumers unexpected fees and sell them to brokers as leads.
State attorneys general possess the authority to investigate these practices right now, under consumer protection and Unfair and Deceptive Acts and Practices statutes, without waiting for federal action. We’re calling on the National Association of Attorneys General to take up housing market integrity as a coordinated enforcement priority and specifically:
- Investigate Zillow’s compliance with the August settlement moving forward and launch consumer protection investigations into dominant listing platforms.
- Investigate patterns and practices of “mortgage kickbacks” between large online platforms and mortgage companies.
- Investigate Compass’s “pocket listing” strategy of marketing properties inside its own network before exposing them to the public market; review the Compass-Anywhere acquisition.
- Establish a multistage working group to share evidence, coordinate litigation strategy, and align enforcement across state lines.
“When the federal government won’t protect Americans seeking housing from exploitative listings platforms, state attorneys general can step up,” said Ella Fanger, corporate power policy advisor at Demand Progress Education Fund. “Zillow and other companies must be held accountable for their abuses of market power.”