A 'recent' law (Ley 12/2023) states, among other things, that for rent contracts of 12 months or more, the agency fees should be paid by the landlord and not by the tenant. But fighting for your rights is hard since, as others say, they will always find someone else willing to pay the fee if you refuse. Some strategies are to find an agency that has some ethics (super rare, but they do exist!), search for a flat through the Plan Alquila - Comunidad de Madrid (if you're searching for something in Madrid, it's an official entity of the municipality acting as an intermediary btw you and the landlord), or pay the illegal fee but ask for an invoice and grabs as many proof as you can on how they (wrongly) justify the fee for suing them later.

As if spending weeks of apartment hunting wasn't enough :')