The alleged action by the companies limits choices for people who use such services to find rental homes, said the agency.
The Federal Trade Commission (FTC) sued real estate companies Zillow and Redfin for allegedly entering into an unlawful agreement that suppressed advertising competition for multifamily properties, the agency announced in a Sept. 30 statement.
The Sept. 30 lawsuit, filed in the District Court for the Eastern District of Virginia, stated that millions of Americans use online rental marketplaces or internet listing services (ILS) to search for and find rental homes, with a few players, such as Zillow and Redfin, dominating this space. The companies are two of America’s largest rental ILS networks in terms of traffic and revenue, said the FTC statement.
According to the lawsuit, Zillow and Redfin have, for years, “competed fiercely” to sell advertising space to property managers looking to rent out their units.
“But Zillow has no interest in continuing to compete with Redfin on the merits of its rental advertising offering,” the complaint reads.
“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.”
Under the agreement, Redfin agreed to stop selling advertising for multifamily properties, terminate all such existing contracts, and transition these ad customers to Zillow, according to the lawsuit.
“Redfin has agreed to stay out of the market for up to 9 years,” it said.
Subsequently, Redfin terminated hundreds of employees supporting this business at the company, agreeing to help Zillow hire its preferred candidates from this pool, the complaint stated. As it wound down the multifamily ad business, Redfin also handed over certain sensitive information to Zillow.
As a result, Redfin’s multifamily business ceased to exist. Going forward, the company’s websites will only act as syndicates hosting listings from Zillow, according to the lawsuit.
“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 (that is, buildings with 25 or more units),” the complaint reads.
“Zillow and Redfin’s unlawful agreement eliminates competition in violation of Section 1 of the Sherman Act. Considered as an acquisition, it is unlawful under Section 7 of the Clayton Act.
“The wholesale elimination of critical competition in this highly concentrated space will harm rental advertisers and the Americans who rely on ILSs to find their next home.”