The Federal Trade Commission (FTC) has reached a settlement requiring Zillow to abandon a $100 million agreement with rival Redfin that regulators argued was designed to eliminate competition in the online rental advertising market. The settlement was announced Monday, just as a trial over the arrangement was set to begin.
The FTC alleged that the 2025 agreement effectively removed Redfin as an independent competitor in the advertising market for multifamily rental properties. Competition in these listing platforms is considered crucial, as more than 30 percent of U.S. households rent their homes, according to the FTC.
Under the original deal, Zillow paid Redfin $100 million to cease its rental advertising business, transfer its customers to Zillow, and refrain from entering the market for up to nine years. Redfin also agreed to exclusively repost listings provided by Zillow, altering its websites from an independent source of listings to one that relied on Zillow's content.
"Today's settlement unwinds an agreement under which Zillow paid Redfin $100 million to stop competing and hand off all its customers to Zillow," said Daniel Guarnera, director of the FTC's Bureau of Competition. "This kind of payment to a competitor to exit a market and stop competing violates the antitrust laws."
The FTC's initial complaint, filed in September 2025, contended that the arrangement was likely to lead to increased advertising prices for property managers and reduced incentives for Zillow and Redfin to compete for renters and enhance their services. An expert for the FTC and five involved states calculated that advertising prices rose by an average of 14.5 percent after Redfin exited the competitive landscape, with some property managers reducing their online advertising altogether.
The five states that joined the federal lawsuit – New York, Virginia, Arizona, Connecticut, and Washington – had their cases consolidated with the FTC's action. The new settlement aims to restore competition.
Restoring Competition
As part of the settlement, Redfin is required to restart its rental advertising business within six months of the order's finalization and invest millions of dollars in rebuilding the operation. While Redfin can continue to display Zillow listings, it will be free to pursue its own rental advertising clients and secure additional listings independently. The FTC stated that Redfin has committed to substantial, multi-year investments to become a stronger competitor than it was prior to the 2025 agreement.
The settlement also includes provisions preventing Zillow from restricting Redfin's independent competitive activities or demanding nonpublic, competitively sensitive information. Zillow must also facilitate Redfin's ability to interview Zillow employees and waive certain noncompete and anti-poaching clauses that could hinder workers from joining Redfin. Once Redfin's rental advertising business is operational again, Zillow must offer certain customers the option to cancel or renegotiate contracts without fees or penalties, potentially allowing property managers to seek alternative advertising services.
The order is expected to remain in effect for 10 years, with potential monetary penalties for Redfin if it fails to meet its commitments. Regulators anticipate that increased competition among listing platforms will provide landlords and property managers with more advertising choices, which should ultimately benefit renters through a broader range of available listings. However, the settlement does not guarantee immediate rent reductions or provide direct refunds to renters who secured properties during the period in question.
The proposed order requires approval from U.S. District Judge Anthony Trenga before becoming legally binding. This case emerges as Zillow navigates another significant dispute concerning access to property listings in the Chicago area and surrounding Midwest markets, where access to data feeds has been suspended by Midwest Real Estate Data (MRED).