Zillow is dominant in the market for online rental listings—more formally known as Internet Listing Services (ILS)—which are used by renters to search for and find their next rental home or apartment. Zillow controls over half of this market, per its own estimates. According to Comscore’s visitor-traffic analytics, Zillow overtook CoStar (owner of Apartments.com) in 2022 to become the nation’s leading ILS platform. Redfin, which ranks third, acquired RentPath(owner of Rent.com and ApartmentGuide.com) in 2021.
Zillow competes with online rental platforms in the sale of advertising to property managers of multifamily units. At least in theory.
Just as many branded drugs have paid off generic entrants not to compete, Zillow has tried to maintain its dominance in ILS by paying off Redfin directly, which has drawn the ire of antitrust authorities. In September 2025, the FTC filed a lawsuit against Zillow and Redfin, claiming the companies engaged in an unlawful arrangement not to compete. According to the complaint, Zillow provided Redfin with $100 million and additional compensation in exchange for Redfin’s withdrawal from the ILS market. As part of its deal with Zillow, Redfin allegedly agreed to terminate existing advertising contracts, cease competing in the multifamily advertising space, and act solely as a distributor of Zillow’s listings. The FTC contends that this arrangement extinguished direct competition between the two companies, potentially leading to higher costs and less favorable terms for advertisers of multifamily units.
A recidivist offender
Seemingly unconstrained by antitrust law, Zillow now appears to be using a proxy to exclude another entrant, Homes.com, in yet another market that Zillow dominates—online real estate listings.
In investor documents, Zillow notes that it controls nearly two-thirds of the U.S. real estate audience share for listings. Smaller competitors in this market include Realtor.com, Redfin, and Homes.com.
In the market for online real estate listings, Zillow boasts that its is 2.5 times larger than its nearest competitor, Realtor.com.
Zillow exercises its market power over agents, by charging a premium over the competitive commission rates. Multiple class actions allege that Zillow charges agents commission rates nearly double the industry norm, and it steers homebuyers toward its in-house mortgage products.
So what’s the latest scheme to induce exit by a rival? Enter D.E. Shaw, a large hedge fund that owns significant stock in Zillow. D.E. Shaw is running a campaign, potentially at Zillow’s behest, to demand that Homes.com exit the market for online real estate listings. In a letter to CoStar’s board on February 4, 2026, citing performance issues, the hedge fund insisted that CoStar “develop an alternative strategy for Homes.com that involves exiting, spinning off, divesting, or dramatically reducing spending on the business to breakeven by 2027.” D.E. Shaw’s demand follows on the heels of an identical demand by Third Point in January 2026, another hedge fund that held approximately $184 million in Rocket Companies, the owner of Redfin, as of the fourth quarter of 2025.
The conflict of interest is not subtle. D.E. Shaw holds approximately $204 million across Zillow, Opendoor, Rocket/Redfin, Compass, and Anywhere Real Estate—every significant residential real estate portal and portal-adjacent business that competes directly or indirectly with Homes.com. These competitors stand to benefit if Homes.com exits the real estate listings market, leading to windfall gains for its investors. Neither D.E. Shaw nor Third Point disclosed these competing interests anywhere in their activist letters.
The antitrust concern here has a name: common ownership. Landmark research by José Azar, Martin C. Schmalz, and Isabel Tecu found that common ownership in the airline industry drove up ticket prices by an estimated three to seven percent, and parallel research found similar effects in commercial banking. Although the mechanism differs, the result is the same: investors or platforms with ownership interests across rival firms leverage that position to dampen competition between them.
The competitive threat that Homes.com poses to Zillow
When a homebuyer clicks “Contact Agent” on Zillow’s website, research suggests the buyer is typically not connected to the listing agent but routed to a buyer’s agent who pays Zillow for the lead through commission sharing. Zillow then steers borrowers toward Zillow Home Loans, its affiliated mortgage lender, with agents reportedly required to hit referral quotas to maintain platform access. Under its Flex program, Zillow collects referral fees of up to 40 percent of the agent’s commission (well above the industry norm of 25 percent). when a transaction closes. Those costs are ultimately passed through to buyers and sellers in the form of higher commissions and less flexible pricing. Independent research has found that borrowers using Zillow Home Loans pay thousands more on average, with disparate impacts on veterans, low-income borrowers, and Black borrowers. Similarly, when Rocket acquired Redfin, company explained how it began funneling customers toward Rocket Mortgage. In contrast, when homebuyers click on “Contact Agent” on Homes.com, the buyers reach the listing agent directly, and there is no affiliated mortgage lender.
The competitive threat that Homes.com poses to Zillow is not merely a matter of market share. It is a matter of business model. That distinction creates downward pressure on agent costs across the market. Remove an alternative business model, and Zillow’s pricing power over agents—and by extension, over consumers—faces no meaningful check. Moreover, the anticompetitive effects are the same regardless of whether the hedge funds are acting at the behest of Zillow and Redfin, or instead are acting purely in pursuit of their own financial interests.
Whether Homes.com succeeds on its merits is ultimately a question for the market to answer, not for conflicted hedge funds to dictate. The question for regulators is narrower and more urgent: when investors hold nine-figure stakes in a dominant platform’s competitors, every one of which monetizes consumers through lead diversion, commission sharing, or mortgage steering, while simultaneously using activist pressure to eliminate a well-capitalized challenger, does that conduct warrant the same scrutiny the government has already applied to Zillow’s direct efforts to exclude a rival? The DOJ and FTC have the tools. The common ownership scholarship points the way. Americans, many of whom currently struggle to afford the housing market deserve enforcers willing to ask the question.