The Federal Trade Commission (FTC) has filed a lawsuit against Zillow and Redfin, accusing the two companies of striking an unlawful agreement that removed Redfin as a competitor in the rental advertising market.
The case, filed on September 30, 2025, could reshape how internet listing services (ILSs) operate at a time when millions of renters rely on them to find their next home.
What’s at Stake in the Rental Ad Market
Internet listing services, or ILSs, are the platforms that connect property managers with renters searching for housing.
Sites like Zillow Rentals, Rent.com, Apartments.com, and ApartmentGuide.com have become the go-to tools for tenants looking to browse and compare available apartments.
The FTC argues that healthy competition in this space is crucial. Without it, advertising costs could climb for property managers, while renters may face fewer choices and less innovation when it comes to search tools and user experience.
The Alleged Agreement Between Zillow and Redfin
According to the FTC’s complaint, Zillow agreed to pay Redfin $100 million plus additional compensation in February 2025 to effectively remove them from competing in multifamily rental advertising.
The agreement allegedly required Redfin to:
- Terminate its contracts with advertising customers and allow Zillow to take over that business.
- Halt all competition in the multifamily rental advertising market for up to nine years.
- Function only as an exclusive syndicator of Zillow listings, making Redfin’s rental platforms mirror images of Zillow’s sites.
The deal was presented publicly as a “partnership,” but the FTC says it was designed to shield Zillow from head-to-head competition.
Impact on Employees and the Market
In connection with the agreement, Redfin fired hundreds of employees, then helped Zillow hire some of those laid-off workers.
The FTC argues this maneuver further weakened Redfin’s role as an independent competitor and consolidated Zillow’s position in an already concentrated market.
Daniel Guarnera, Director of the FTC’s Bureau of Competition, made the agency’s position clear.
“Paying off a competitor to stop competing against you is a violation of federal antitrust laws. 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.”
Legal Basis of the Case
The FTC alleges that the Zillow-Redfin arrangement violates federal antitrust law as an unlawful acquisition under Section 7 of the Clayton Act.
“Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect ‘may be substantially to lessen competition, or to tend to create a monopoly.’”
According to the FTC’s complaint, the agreement destroys competition in rental advertising, harming both property managers and renters. The agency warns that the deal could:
- Lead to higher prices and worse terms for multifamily unit advertising.
- Reduce incentives for Zillow and Redfin to compete for renters, including investments in attracting site visitors and improving ILS tools.
With notable competitors like Apartments.com still very much in the game, though, the second claim could be difficult to prove.
Collaboration with States
The FTC also noted that it worked closely with several state attorneys general during its investigation. The agency said it plans to continue collaborating with state-level enforcers as the case moves forward.
What to Expect
The FTC’s complaint seeks to block Zillow and Redfin from continuing their agreement and leaves the door open to remedies like asset divestiture or rebuilding business operations to restore competition.
The case was filed in the U.S. District Court for the Eastern District of Virginia following a 3-0 Commission vote.
At this stage, the allegations represent the FTC’s perspective, and the outcome will depend on the court’s decision. If the FTC prevails, Zillow and Redfin could face significant structural changes to their rental advertising businesses.
The FTC lawsuit highlights how quickly the competitive landscape can shift when major players consolidate. With ILS platforms at the center of how renters search and how property managers advertise, the result of this case will be one to watch closely.
As of yet, it’s unclear whether the FTC will be required to provide proof that the removal of Redfin as a competitor in the rental arena “tends to create a monopoly” in Zillow’s favor, when several well-known competitors remain.
Stay tuned for updates as the case develops.
