The Federal Trade Commission (FTC) and a coalition of five states have filed separate antitrust lawsuits against real estate giants Zillow and Redfin. The legal actions challenge a partnership that made Zillow the exclusive provider of multifamily rental listings for Redfin, a deal regulators allege harms competition in the online real estate market.
The federal lawsuit was filed on September 30, 2025, followed by a coordinated suit from the attorneys general of Arizona, Connecticut, New York, Virginia, and Washington on October 1, 2025. Both legal challenges focus on a $100 million payment from Zillow to Redfin to secure the exclusive arrangement.
Key Takeaways
- The U.S. Federal Trade Commission has sued Zillow and Redfin, alleging their rental partnership violates antitrust laws.
- Five states—Arizona, Connecticut, New York, Virginia, and Washington—have filed a separate, similar lawsuit.
- The legal actions center on a $100 million deal making Zillow the exclusive platform for Redfin's multifamily rental listings.
- Regulators argue the agreement unlawfully reduces competition, potentially leading to increased costs for property managers and renters.
Federal Regulators Allege Unlawful Market Consolidation
The Federal Trade Commission initiated legal proceedings against Zillow Group and Redfin, claiming the companies engaged in anticompetitive practices. The lawsuit, filed in federal court, targets a strategic agreement where Zillow became the sole third-party platform to display rental listings from Redfin's network.
According to the FTC's complaint, this exclusive deal effectively removes Redfin as an independent competitor in the multifamily rental listing space. The agency asserts that such consolidation can stifle innovation and limit choices for landlords and consumers seeking rental properties online.
The Financials of the Deal
The core of the dispute is a significant financial transaction. Zillow paid Redfin approximately $100 million to secure the exclusive rights to its multifamily rental inventory. Regulators view this payment as a move to eliminate a key competitor rather than to compete on merit.
Prior to the agreement, real estate portals competed to attract listings from property managers. The FTC argues that by paying Redfin to exit this part of the market, Zillow has weakened a key competitive force, which could result in higher advertising fees for property managers—costs that may ultimately be passed on to tenants.
Five States Join Legal Challenge
A day after the FTC's announcement, a bipartisan group of state attorneys general launched their own lawsuit, echoing the federal government's concerns. The states of Arizona, Connecticut, New York, Virginia, and Washington allege that the Zillow-Redfin partnership harms local rental markets by reducing competition among online listing services.
A Coordinated Effort
The involvement of multiple states underscores the widespread regulatory concern over the agreement's potential impact. By filing their own action, the states can address specific harms within their jurisdictions and seek remedies tailored to their local markets.
The states' complaint argues that a competitive market for rental listings is crucial for ensuring fair prices and providing consumers with comprehensive options. They contend that the exclusive nature of the Zillow-Redfin deal undermines this dynamic.
Understanding Antitrust Law
Antitrust laws are designed to protect competition in the marketplace. They prohibit business practices that unreasonably restrain trade, create monopolies, or otherwise harm consumers. In this case, the lawsuits allege that the agreement between Zillow and Redfin constitutes an unlawful restraint of trade by eliminating a competitor through a payment rather than through superior service or innovation.
The legal action from the states signals that scrutiny of the deal extends beyond the federal level. It represents a significant, unified front from government bodies aimed at preserving a competitive landscape for online real estate services.
Impact on the Online Rental Market
The lawsuits contend that the partnership between two of the largest online real estate platforms has significant consequences for the industry. By removing Redfin's rental platform as a standalone option, landlords and property managers seeking to advertise multifamily units have fewer choices.
Regulators are concerned this reduction in competition could lead to several negative outcomes:
- Higher Advertising Costs: With fewer major platforms competing for their business, property managers may face increased prices to list their rental properties.
- Reduced Innovation: A less competitive market may disincentivize companies from developing new features or improving services for renters and landlords.
- Limited Consumer Choice: Renters may have to visit fewer, more dominant websites, potentially missing out on listings that might have been available on a more diverse set of platforms.
The core of the legal argument is that the $100 million payment was not for a product or service, but rather a payment for Redfin to cease competing in a specific market segment. This, according to the complaints, is a classic example of anticompetitive behavior that harms the market as a whole.
Next Steps in the Legal Process
Both Zillow and Redfin will now have to respond to the lawsuits in federal court. The legal process is expected to be lengthy, involving discovery, motions, and potentially a trial if a settlement is not reached.
"Competition is the cornerstone of a fair and dynamic economy. When companies choose to buy off their rivals instead of competing with them, consumers and businesses lose out," a statement from one of the state attorneys general noted, highlighting the principle behind the legal challenge.
The companies may argue that their partnership is a pro-competitive business arrangement that allows them to focus on their core strengths, ultimately benefiting consumers. However, they will need to convince the court that the exclusive nature of their deal does not violate federal and state antitrust laws.
The outcome of these cases could have a lasting impact on how online platforms are allowed to partner and compete. A ruling against Zillow and Redfin could set a precedent for other digital marketplaces, reinforcing the legal boundaries against eliminating competitors through financial agreements.
