The Federal Trade Commission moved on Tuesday to permanently block a rental syndication deal between Zillow and competing real estate portal Redfin, according to a complaint filed in U.S. District Court in Eastern Virginia.
The two companies announced the $100 million deal, which involved Zillow hosting all of Redfin’s rental listings for buildings with more than 25 units, in February. Zillow also agreed to pay Redfin an unspecified amount for leads as part of the deal, which had an initial five-year term with up to four years of automatic renewals.
“For years, these companies have competed fiercely to sell advertising to property managers looking to rent their available units,” the FTC wrote. “But Zillow has no interest in continuing to compete with Redfin on the merits of its rental advertising offering.”
“Instead, on February 6, 2025, Zillow and Redfin executed an unlawful agreement to remove competition from this already highly concentrated market, starting with a $100 million payment to Redfin to exit the ILS advertising market,” the complaint continued.
News of the lawsuit was first reported by Real Estate News.
In its complaint, the FTC alleged that Redfin had completely shut down its rental operations as part of the agreement.
“Going forward, its websites will serve merely as one of several ‘syndicators’ hosting a copy of Zillow’s listings,” the complaint said.
“This agreement is nothing more than an end run around competition that insulates Zillow from head-to-head competition on the merits with Redfin for customers advertising multifamily buildings,” the complaint said.
In response to the lawsuit, Zillow defended its agreement with Redfin.
“It is pro-competitive and pro-consumer by connecting property managers to more high-intent renters so they can fill their vacancies and more renters can get home,” a Zillow spokesperson said. “We remain confident in this partnership and the enhanced value it has delivered and will continue to deliver to consumers.”
Redfin — which was recently acquired by Rocket Companies — said that it “strongly disagrees” with the FTC’s allegations.
“Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters,” a Redfin spokesperson said. “By the end of 2024, it was clear that the existing number of Redfin advertising customers couldn’t justify the cost of maintaining our rentals sales force. Partnering with Zillow cut those costs and enabled us to invest more in rental-search innovations on Redfin.com, directly benefiting apartment seekers.”
News of the lawsuit came the same day that Zillow and CoStar traded barbs related to a copyright infringement lawsuit. In that suit, CoStar claims that Zillow took proprietary rental photos from CoStar-owned Homes.com, and also distributed those photos via syndication agreements to other sites including Redfin.
In its new lawsuit, the FTC said that Redfin had been actively working to grow its presence in the rental search space through 2024, and that it had been profitable in doing so.
Shortly after the agreement was announced, Redfin terminated most of its rental workforce. The FTC said the company then agreed to help Zillow rehire its pick of employees.
“This agreement to eliminate competition is obviously anticompetitive,” the FTC wrote of the agreement. “It will result in reduced choice, higher prices, and reduced quality for multifamily rental advertising customers and will provide no cognizable procompetitive benefits.”
The FTC took issue with the fact that Zillow and Redfin were among the top three rental search platforms in the country, alongside CoStar. The commission said that the three competing portals accounted for over 85 percent of online rental listing revenue last year.
“The combination of two of the three leading ILSs increases concentration in an already highly concentrated market, making it presumptively illegal as it may substantially lessen competition,” the FTC wrote.
