The US government says Zillow paid Redfin $100 million to back out of the rental ad market — a deal federal regulators claim is illegal and hurts both renters and property managers.
In a lawsuit filed Tuesday in US District Court in Virginia, the Federal Trade Commission (FTC) accused Zillow and Redfin of striking an unlawful agreement to stop competing in online rental advertising.
The FTC says this agreement removes Redfin as a competitor, giving Zillow more power in a market many renters depend on.
According to the FTC, the deal, made in February 2025, gave Zillow a big advantage. Redfin allegedly agreed to exit the rental ad business for up to nine years and instead direct its customers to Zillow.
As part of the agreement, Redfin would also become an "exclusive syndicator" — meaning it would only display Zillow's listings on its own site, CNN reported.
"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.
He added, "Zillow paid millions of dollars to eliminate Redfin as an independent competitor in an already concentrated advertising market."
“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"
— Melody Wright (@m3_melody) September 30, 2025
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FTC Sues to Block Zillow-Redfin Rental Ad Deal
The lawsuit also claims Redfin ended contracts with advertisers, laid off around 450 employees — including many in the ad division — and even helped some of those employees move over to Zillow.
The FTC believes this deal will raise prices and reduce choices for rental property owners and renters.
It argues that fewer competitors in the market could also mean less effort from companies to attract renters or improve their services.
Zillow disagrees. A company spokesperson said the agreement helps both renters and property managers by making it easier to connect.
"Our listing syndication with Redfin benefits both renters and property managers and has expanded renters' access to multifamily listings across multiple platforms," they said.
According to CBS News, Redfin also pushed back against the FTC's claims. "Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters," the company said.
Redfin explained that by late 2024, it couldn't justify keeping its rentals sales team and chose to partner with Zillow to save costs and focus on rental-search tools.
The FTC is asking the court to block the deal and is considering whether Zillow may need to give up certain assets.
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