Behind the Scenes: Researching the FTC's Case Against Zillow and Redfin
I've spent months tracking and reading court filings in the FTC's case against Zillow and Redfin, all leading up to the trial I attended this week – and it turns out the investigative process was a lot more interesting than the courtroom.
Why it matters: Litigation is the only place these companies are forced to hand over their internal numbers, strategy documents, and sworn testimony, which makes a court docket the richest source of industry information almost nobody reads.
Personally, the most interesting materials were the redacted documents: deposition transcripts the parties asked the court to seal, and internal documents stamped HIGHLY CONFIDENTIAL on every page.
A redaction is basically a giant spotlight on something the parties don’t want the public to see, so by definition it should be interesting.
I can't directly un-redact anything, but the surrounding context often gives it away: each side redacts the same document differently, sealed passages turn up quoted in filings that aren't sealed, and the questions around a blacked-out answer provide clues.
For example, in the deposition below, a reasonable person could assume “And why not?” would only be asked after a negative response – and that negative response is the same length as the previous two redacted answers.
Something that caught my attention was why Zillow and Redfin fought so hard to keep one particular deposition away from the judge, filing a motion “in limine” to strike it from the evidence entirely.
A motion in limine keeps evidence out of the case before it starts, so the judge never weighs it, while sealing only hides a document from the public.
It came down to one question – whether Redfin's exit from rentals was permanent – because a competitor gone for good is exactly the harm the FTC sued to stop.
The depositions, emails, messages, and internal documents also provide a lot of great quotes.
Even when a document is sealed, the good lines usually surface anyway, quoted by whichever side they help.
For instance: A Zillow exec wanted "realtor.com as close to exclusive as possible which then hurts Redfin and potentially brings them back to the table," and a second Zillow document quoted by the FTC describes "doing an uneconomic deal with realtor.com to ensure we have exclusivity there."
And as I posted on LinkedIn, there are plenty of quotes where Redfin's former CEO could have made excuses, but takes responsibility instead – a refreshing thing to watch a CEO do.
There are needle-in-a-haystack moments too, like this one from a different case, Zillow v. MRED.
It was one number in a 42-word footnote, one of 365 footnotes in a 135-page exhibit, one of 56 exhibits in a single docket entry – in one of four cases I'm tracking.
All of which led to one unique data point that didn’t exist anywhere else!
After thousands of documents, this week it was time to go see the trial in person, on my own dime, like I did with the Compass v. Zillow court hearing last year.
A trial is where sealed exhibits get read in open court and witnesses tend to be quite honest under oath.
Eleven months after the FTC sued, the case had run to 392 docket entries and many thousands of pages, with more than 40 lawyers involved and thirteen companies that weren't even sued bringing their own counsel to the party.
Anticipation was high, and in the very exciting first minute of the trial – which I had flown to Virginia to attend – the parties announced they had reached a settlement over the weekend, and the trial was off.
The bottom line: Many lawsuits never reach a trial, but the ones that get through discovery leave behind a fascinating and richly detailed public record.
It's a rare look at how big companies actually decide things, in their own words, with no PR filter in between.
And for me the fun is the hunt: a redaction box, an easily ignored footnote, a sentence one side sealed and the other quoted – pieced together into a story you can't read anywhere else.