FTC Takes Action: Zillow and Redfin Face Lawsuit for Allegedly Colluding to Stifle Rental Advertising Competition

The Federal Trade Commission (FTC) recently took action against Zillow and Redfin. They allege that the two companies made an illegal deal that undermines competition in the online rental market. This lawsuit is important because it impacts how millions of people search for rental homes.

Zillow and Redfin are major players in the rental listing space, with sites like Zillow Rentals and Rent.com attracting a lot of traffic. The FTC claims that in February 2025, they entered an agreement that effectively sidelined Redfin as a competitor in advertising for rental properties.

According to the complaint, Redfin received $100 million and other benefits from Zillow in exchange for some significant concessions. These included:

• Ending contracts with its advertising clients and handing over that business to Zillow.
• Agreeing not to compete in the advertisement market for up to nine years.
• Acting merely as a platform for Zillow’s listings, turning Redfin’s site into a mirror of Zillow’s.

Zillow and Redfin called this a “partnership,” but the FTC sees it differently. Daniel Guarnera, the FTC’s Bureau of Competition Director, stated, “Paying off a competitor to stop competing against you is a violation of federal antitrust laws.” He emphasized the negative effects this could have on renters, property managers, and the overall housing market.

The consequences of this agreement could be serious. The FTC believes it would likely lead to higher prices and worse terms for advertising rental units. It could also reduce innovation and investment in creating better tools for renters searching for homes.

In a broader context, this case highlights ongoing concerns about competition in the digital economy. A 2022 study from the American Economic Association revealed that a lack of competition in tech and online platforms could lead to fewer choices and higher prices for consumers. This lawsuit could help ensure that such platforms continue to innovate and compete openly.

The FTC aims to stop this agreement and may even consider breaking up some of the companies’ assets to restore competition. They have worked closely with several state attorneys general during this investigation and are committed to maintaining fair competition in the marketplace.

This case is not just about two companies; it’s about protecting renters and promoting healthy competition in online services. The outcome could set important precedents for how businesses operate in the digital space moving forward.

For more information on the FTC’s mission to promote competition, you can visit the FTC website.

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