The arrangement had a certain logic to it. In February 2025, Zillow paid its rival Redfin $100 million. In exchange, Redfin shut down its rental advertising operation, transferred its customers to Zillow, and agreed to stay out of the market for up to nine years. Fewer competitors, reduced pressure on prices, one dominant platform. Federal regulators noticed.
On August 24, 2026, the day a trial had been scheduled to begin, the Federal Trade Commission (FTC) and attorneys general from five states — Arizona, Connecticut, New York, Virginia, and Washington — announced a settlement with both companies. The deal resolves antitrust claims arising directly from that $100 million agreement.
The market at the centre of the case is the internet listing services (ILS) sector: websites such as Zillow Rentals, Rent.com, and ApartmentGuide.com where renters search for apartments and property managers advertise vacancies, primarily in buildings with more than 25 units. The FTC described the sector as already concentrated before Zillow and Redfin struck their deal.
The consequences were measurable. Shortly after the 2025 agreement was announced, Redfin fired hundreds of employees from its rental division and then helped Zillow hire from among those laid-off workers. An expert for the FTC and the states estimated that after the deal took effect, landlords' advertising costs on Zillow's platform rose an average of 14.5%. Some property managers stopped buying online listings altogether.
The FTC filed its original complaint in September 2025 in the U.S. District Court for the Eastern District of Virginia, alleging the deal violated federal antitrust law. Zillow and Redfin moved to dismiss. In May 2026, U.S. District Judge Anthony Trenga rejected that motion, ruling the FTC had plausibly alleged antitrust violations. Trial was set. Then, on the morning it was due to start, came the settlement.
The stipulated order, filed in the Eastern District of Virginia, runs for 10 years. Its central requirement: Redfin must rebuild an independent rental advertising business within six months of the order being finalised, including constructing the technological infrastructure and hiring sufficient staff. Failure to do so carries financial penalties.
The order also strips out anticompetitive provisions from the original deal. Gone are the restrictions on Redfin's ability to sell its own advertising services and the requirements that Redfin share competitively sensitive information with Zillow. Zillow must waive noncompete restrictions so Redfin can recruit former employees back.
Redfin, which was acquired by Rocket Companies before the settlement was reached, is permitted to keep displaying Zillow's rental listings on its platforms and maintain the partnership through at least 2030. The condition is that it competes independently at the same time. The companies will pay $2 million to reimburse the five state attorneys general who joined the case.
The FTC commission approved the order on a 2-0 vote. The agency said the settlement restores competition more quickly and with more certainty than a trial victory would have delivered.
Going forward, both companies must notify the FTC before entering any new syndication agreement for multifamily rental properties that restricts either party's ability to compete for ILS customers. Whether Redfin can rebuild its rental operation to a scale that meaningfully restores pre-deal competition remains an open question. So does whether the rise in landlords' advertising costs will ease once a second platform is back in business.
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