The Federal Trade Commission sued Zillow and Redfin Tuesday, alleging the real estate companies violated federal antitrust laws through a $100 million agreement that eliminates competition in the rental housing advertising market. The complaint, filed in federal court, accuses the companies of structuring an illegal deal disguised as a partnership to suppress competition on internet listing services that millions of Americans use to find rental homes.
The FTC alleges that in February 2025, Zillow Group Inc., Zillow Inc., and Redfin Corporation entered into an agreement that effectively dismantled Redfin as a competitor in the market for placing rental property advertisements on internet listing services. Under the deal, Zillow paid Redfin $100 million plus additional compensation in exchange for Redfin's exit from the multifamily rental advertising business.
According to the complaint, Redfin agreed to three key terms that the FTC characterizes as anti-competitive. First, Redfin committed to ending its contracts with advertising customers and helping Zillow absorb that business. Second, the company agreed to stop competing in the advertising market for multifamily properties for up to nine years. Third, Redfin would serve merely as an exclusive syndicator of Zillow listings, effectively making Redfin's websites copies of listings that appear on Zillow's platforms.
The companies operate two of the nation's largest rental internet listing service networks by traffic and revenue. Zillow's properties include Zillow Rentals, Rent.com, and ApartmentGuide.com, while Redfin operates its own network of rental listing sites. These platforms serve as critical infrastructure for the rental housing market, connecting property managers with potential tenants.
"Paying off a competitor to stop competing against you is a violation of federal antitrust laws," said Daniel Guarnera, Director of the FTC's Bureau of Competition. "Zillow paid millions of dollars to eliminate Redfin as an independent competitor in an already concentrated advertising market—one that's critical for renters, property managers, and the health of the overall U.S. housing market."
The FTC alleges that while Zillow and Redfin characterized their arrangement as a "partnership," the agreement actually represents an attempt to circumvent competition laws. Rather than competing head-to-head on the merits, the deal allows Zillow to eliminate a major competitor through financial compensation.
The human cost of the agreement was significant, according to the complaint. In connection with the deal, Redfin terminated hundreds of employees, then assisted Zillow in hiring selected workers from those who were fired. This staffing arrangement further consolidated talent within Zillow's operations while reducing Redfin's capacity to compete independently.
The FTC contends that this agreement harms multiple stakeholders in the rental housing ecosystem. Property managers seeking to advertise rental properties lose the benefit of competition between platforms, potentially facing higher advertising costs and fewer service options. Renters searching for homes also suffer harm as reduced competition may lead to less innovation and fewer choices in how rental properties are marketed and discovered online.
Beyond antitrust violations, the FTC alleges the agreement constitutes an unlawful acquisition under Section 7 of the Clayton Act. This federal law prohibits mergers and acquisitions that may substantially lessen competition or tend to create a monopoly in any line of commerce.
The rental housing advertising market was already concentrated before this agreement, making the elimination of competition between these major players particularly concerning to regulators. Internet listing services play a crucial role in the broader U.S. housing market, serving as the primary discovery mechanism for millions of renters seeking homes.
The FTC's legal action seeks to prevent the companies from continuing their allegedly illegal agreement and restore competitive dynamics to the rental advertising market. The case represents the agency's broader effort to scrutinize agreements that may harm competition in digital marketplaces, particularly those affecting essential services like housing.
This lawsuit comes amid increased regulatory scrutiny of major technology and real estate platforms. The rental housing market has become increasingly important as homeownership remains out of reach for many Americans, making competitive rental listing services essential for housing accessibility.
The outcome of this case could set important precedents for how antitrust law applies to agreements between major digital platforms in concentrated markets. It also highlights the FTC's commitment to challenging arrangements that eliminate competition through financial compensation rather than merit-based competition.