US FTC Moves to Unwind Zillow-Redfin Deal, Requiring Redfin to Re-enter Rental Market

The U.S. Federal Trade Commission is seeking to unwind key parts of the rental listing agreement between Zillow Group Inc. and Redfin Corp., and is requiring Redfin to re-enter the market.

The FTC said Monday it will file a consent order to resolve its lawsuit against the two companies and restore competition in the online platforms used by renters and property managers. The agency said the 2025 agreement involved Zillow paying Redfin $100 million to shut down its internet listing service business, transfer advertisers to Zillow, and exit the market for up to nine years.

Redfin Must Return to Rental Business

The proposed order, which would be effective for 10 years, requires Redfin to relaunch its rental advertising business within six months of the order becoming final.

Redfin must also build the technology needed to display customer listings on its rental website, hire a general manager, sales staff, and customer support team, and invest millions of dollars to grow the business.

The order also removes restrictions on Redfin's ability to sell advertising services and display its own customer listings. Zillow must facilitate Redfin's hiring of certain employees and allow some customers to renegotiate contracts without penalty once Redfin restarts its business.

"The settlement today unwinds the agreement that paid Redfin $100 million to stop competing and hand over all its customers to Zillow," said Daniel Guarnera, director of the FTC's Bureau of Competition.

FTC Challenges the 2025 Agreement

The FTC alleges that the agreement reached by the two companies in February 2025 destroyed Redfin's competitive position in multifamily rental advertising. At the time, Zillow and Redfin operated major rental listing services, including Zillow Rentals, Trulia, HotPads, Rent.com, and ApartmentGuide.com.

The agency said the agreement allowed Zillow to avoid direct competition with Redfin and further concentrated an already concentrated market.

The FTC, along with Arizona, Connecticut, New York, Virginia, and Washington state, filed the proposed order. The FTC approved the consent order by a 2-0 vote and submitted it to the U.S. District Court for the Eastern District of Virginia. Once approved by the court, the order will be binding.

Zillow's second-quarter revenue rose 18% year-over-year to $772 million, with rental revenue up 31%. The company also issued third-quarter and full-year revenue guidance that fell short of analyst expectations.

Stock Performance

Zillow shares rose 3.26% to $37.05 at Monday's close. In after-hours trading, the stock fell 0.14% to $37.00.