Zillow faces securities class action tied to Redfin deal and FTC scrutiny

Zillow Group is facing a securities class action on behalf of investors who purchased Class A or Class C common stock between Feb. 11, 2025 and May 7, 2026, with Aug. 10, 2026 set as the deadline to seek appointment as lead plaintiff. The case, Breidert v. Zillow Group, Inc., et al., No. 26-cv-02016, is pending in the U.S. District Court for the Western District of Washington and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges Zillow mischaracterized its Feb. 6, 2025 agreement with Redfin as a partnership, when the arrangement allegedly involved a $100 million payment for Redfin to stop competing in multifamily rental advertising, transition that business to Zillow and close the rest of it. Plaintiffs say the deal exposed Zillow to antitrust risk that later became clear when the FTC sued Zillow and Redfin on Sept. 30, 2025, when Zillow's CFO said on Feb. 10, 2026 that higher legal expenses would create an approximately 200 basis point headwind to first-quarter EBITDA margins, and when Reuters reported on May 7, 2026 that a federal judge refused to end the FTC case. Zillow's Class C and Class A shares fell 4.33% and 4.5% after the FTC complaint, 16.54% and 17.13% after the legal-expense disclosure, and 1.9% and 1.76% after the court ruling report, according to the complaint.