FTC Sues Zillow & Redfin Over Alleged Illegal Deal to Stifle Rental Advertising Competition

Key Takeaways

• FTC Lawsuit: The Federal Trade Commission has sued Zillow and Redfin, alleging the two firms struck an illegal agreement that suppressed competition in the rental advertising market.
• $100M Deal: In February 2025, Redfin accepted $100 million and other compensation from Zillow in exchange for ending its rental advertising business and ceasing competition for up to nine years.
• Job Cuts and Transfers: Redfin terminated hundreds of employees under the deal and then helped Zillow hire its pick of those workers.
• Antitrust Concerns: The FTC argues the agreement violates Section 7 of the Clayton Act, eliminating competition in a market critical to renters and property managers.
• Potential Remedies: Regulators are seeking to halt the agreement and may pursue divestitures or restructuring to restore competition.

Deep Dive

The Federal Trade Commission (FTC) has filed suit against Zillow and Redfin, accusing the real estate platforms of entering into an unlawful agreement that eliminated Redfin as a competitor in the online rental advertising market. Regulators allege the arrangement harmed property managers, renters, and the broader housing market by insulating Zillow from direct competition.

According to the FTC’s complaint, the two companies struck a deal in February 2025. In exchange for a $100 million payment and other compensation, Redfin agreed to dismantle its rental advertising business, end customer contracts, and stop competing in multifamily property advertising for up to nine years. Instead, Redfin would act solely as a syndicator of Zillow listings, effectively mirroring Zillow’s sites.

The FTC alleges that Zillow and Redfin marketed the arrangement as a “partnership,” but in practice it eliminated Redfin as an independent rival. As part of the deal, Redfin terminated hundreds of employees, later helping Zillow recruit among those workers.

“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 argues the agreement likely results in higher prices and worse terms for property managers advertising rental units, while also reducing incentives to innovate and improve user experiences for renters. The complaint states that the arrangement violates Section 7 of the Clayton Act as an unlawful acquisition. The Commission’s filing seeks to halt the agreement and contemplates remedies such as divestitures or restructuring to restore competition.

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