FTC sues Zillow and Redfin over a $100 million deal that regulators say illegally removed Redfin as a competitor in online rental advertising.
Regulators warn of consumer harm, including higher advertising costs for landlords, reduced innovation, and fewer choices for renters.
The lawsuit seeks to unwind the agreement, citing violations of antitrust law and working in coordination with state attorneys general.
The Federal Trade Commission (FTC) has filed suit against Zillow and Redfin, accusing the two real estate platforms of striking an illegal deal that removed Redfin as a rival in the online rental advertising market.
According to the complaint, Zillow paid Redfin $100 million and other compensation in February 2025 in exchange for dismantling its advertising business for multifamily rental properties.
Under the arrangement, Redfin allegedly agreed to:
Terminate contracts with its advertising customers and help Zillow take them over
Stop competing in the rental advertising business for up to nine years, and
Syndicate Zillow’s listings exclusively, turning Redfin’s rental pages into a mirror of Zillow’s content.
The FTC said the companies marketed the move as a “partnership,” but in practice, regulators argue it amounts to a payoff designed to protect Zillow from competition.
“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.”
Consumer impact
The FTC contends that Zillow’s agreement with Redfin will harm both property managers and renters by stifling competition. Regulators warn that the arrangement could:
Drive up the cost of advertising rental properties
Limit innovation in how listings are presented and how renters search, and
Reduce incentives for either company to improve user experience.
The complaint further alleges that hundreds of Redfin employees were fired as part of the deal, with Zillow rehiring some of its choice picks.
For renters, the FTC says the deal could mean fewer features, less transparency, and a narrower range of search options at a time when affordability is already strained in the housing market.
Legal and regulatory angle
The lawsuit claims the Zillow-Redfin pact violates Section 7 of the Clayton Act, which prohibits acquisitions that may substantially lessen competition. The agency is seeking to block the agreement, and may pursue remedies such as unwinding parts of the deal, requiring divestitures, or reconstructing parts of Redfin’s rental business to restore competition.
The FTC also worked alongside several state attorneys general in investigating the case and says it expects continued cooperation as the lawsuit proceeds.
Online listing services (ILSs) like Zillow, Rent.com, and ApartmentGuide.com are a key gateway for millions of renters searching for their next home. With fewer major players competing in the market, regulators argue, property managers may face higher costs to advertise units, and those costs could be passed along to renters in the form of higher rent or fewer affordable options.