Federal and State Regulators Reach Settlement Addressing Competition in Rental Advertising

Federal and state regulators have reached a settlement with Zillow and Redfin that would require Redfin to rebuild its independent rental advertising business, following allegations that an agreement between the two real estate companies reduced competition in the market for advertising large multifamily rental properties.

The Federal Trade Commission, along with the Attorneys General of Virginia, Arizona, Connecticut, New York, and Washington, entered into the stipulated settlement with Zillow Group, Inc., Zillow, Inc., and Redfin Corporation. The agreement seeks to resolve federal and state lawsuits accusing the companies of anticompetitive conduct.

The litigation centers on a February 2025 content license agreement between Zillow and Redfin. Under that agreement, Zillow provided rental listing content to Redfin, while Redfin faced restrictions on independently selling and marketing advertising for multifamily rental properties with 25 or more units.

The original agreement prohibited Redfin from directly, or through a third party other than Zillow, selling or marketing certain rental advertising products involving properties with at least 25 units. It also required Redfin to end certain discussions with other parties involving those listings.

Regulators challenged the arrangement under federal antitrust laws and alleged that it amounted to an unlawful restraint of trade, an unlawful acquisition, and an unfair method of competition. Zillow and Redfin deny those allegations, and the settlement does not constitute an admission of liability or wrongdoing.

Settlement Designed to Restore Redfin as a Competitor

A central component of the settlement is the return of Redfin as an independent competitor in the rental advertising market.

Under the proposed order, Zillow and Redfin must eliminate provisions that prevent Redfin from owning and operating its own rental advertising service. The companies are also prohibited from entering into new provisions that prevent Redfin from independently competing with Zillow for Internet Listing Service customers.

The amended agreement removes restrictions on Redfin’s ability to independently display, market, and sell advertising for multifamily rental properties. It also eliminates noncompetition provisions restricting Redfin from selling advertising directly to property management companies and other Internet Listing Service customers.

Redfin must re-enter the business within six months after the court enters the order.

That requirement goes beyond simply allowing Redfin to resume operations. The company must build and deploy a working portal through which customers can upload rental listings for advertising across its rental websites. It must also establish a billing system, hire a general manager, build sales and customer support teams, and conduct targeted advertising to attract customers.

Redfin’s rental advertising network includes Redfin.com, Rent.com, Rentals.com, and ApartmentGuide.com. The order defines the relevant multifamily rental properties as those containing at least 25 individual units.

Zillow Faces Additional Competition Requirements

The settlement also imposes obligations on Zillow intended to give Redfin an opportunity to compete after rebuilding its rental advertising operation.

Zillow must continue providing Redfin with syndication of multifamily rental listings under the modified content license agreement. For nine months after Redfin satisfies the requirements for re-entering the market, certain Zillow advertising customers must also be permitted to exit or renegotiate their Zillow contracts without cost or penalty so they can negotiate or enter into agreements with Redfin.

Zillow is additionally prohibited from engaging in conduct designed to prevent or impede those customers from contracting with Redfin.

The settlement addresses personnel as well. For one year after the order is entered, Zillow must cooperate with Redfin as Redfin evaluates and potentially offers employment to certain Zillow employees involved in sales, marketing, or customer service for Zillow’s rental advertising business.

The order also restricts Zillow from interfering with Redfin’s recruitment of certain Zillow employees. For two years after entry of the order, Zillow would additionally be prohibited, subject to specified exceptions, from soliciting Redfin employees to leave the company.

Financial Payments and Compliance Requirements

The settlement also includes financial obligations.

Zillow and Redfin must collectively pay $2 million to the participating states within 30 days after the court enters the order. The funds may be used for costs and attorneys’ fees, monitoring and enforcement, antitrust and consumer protection activities, and other lawful purposes determined by the state attorneys general. Importantly, the order specifies that the $2 million payment is not a penalty.

Redfin could face separate financial penalties if it does not rebuild its independent rental advertising operation on schedule. If Redfin fails to meet the required conditions within six months, subject to any approved extension, it must pay $1 million to the FTC. An additional $100,000 would apply for each month of continued noncompliance, with total financial penalties capped at $1.6 million.

Both companies will also be subject to ongoing reporting and compliance requirements. The order requires interim and annual compliance reports and gives regulators access to information necessary to determine whether its terms are being followed.

What the Settlement Means for Rental Advertising

The settlement represents a regulatory effort to restore direct competition between two major online real estate platforms rather than simply prohibit future conduct.

Instead of ending the companies’ relationship entirely, the order modifies it while requiring Redfin to rebuild the infrastructure, staffing, and customer relationships necessary to operate as an independent rental advertising competitor.

The requirements could also create additional choices for property managers advertising larger multifamily properties. Once Redfin re-establishes its business, certain Zillow customers will receive an opportunity to reconsider existing contracts and negotiate with Redfin without facing cancellation costs or penalties.

The order is set to remain in effect for 10 years after it is entered by the court, with the court retaining jurisdiction to enforce or modify its requirements.

For regulators, the case reflects continued scrutiny of agreements between digital platforms when those arrangements have the potential to remove an existing competitor from a market. For Zillow and Redfin, the settlement establishes a detailed roadmap for how the two companies can continue sharing rental listing content while restoring Redfin’s ability to compete independently for rental advertising customers.