The U.S. Federal Trade Commission is suing Zillow and Redfin for an alleged illegal agreement to suppress competition in online rental advertising. The deal involved Zillow paying Redfin $100 million, leading to Redfin ending contracts with advertising partners and firing hundreds of employees.

The FTC claims that Zillow’s payment to eliminate Redfin as a competitor violates federal antitrust laws, potentially reducing competition and leading to higher prices for multifamily rental advertising customers. Zillow argues that their agreement with Redfin benefits renters and property managers, expanding access to multifamily listings.

Redfin, acquired by Rocket Companies earlier this year, strongly disagrees with the FTC’s allegations and believes they will prevail in court. The company maintains that their partnership with Zillow increased access to rental listings and customers, while also determining that the cost of maintaining their rentals sales force was not justified.

Despite Zillow and Redfin’s defense of their agreement, the FTC remains firm in its stance that the deal hinders competition. The Commission, in a 3-0 vote, is seeking to end the agreement and potentially require divestiture of assets or business restructuring to restore competition in the rental advertising market.

Read more at Yahoo Finance: FTC sues Zillow and Redfin over deal it accuses of supressing competition in rental ads