FTC settlement reshapes Zillow–Redfin pact

The Federal Trade Commission has reached a settlement with Zillow (Z) and Redfin that resolves litigation alleging the two companies entered into an unlawful agreement affecting competition in the online rental internet‑listing services (ILS) market. The complaint was filed in September 2025 and was joined by the attorneys general of Arizona, Connecticut, New York, Virginia and Washington. The stipulated proposed order has been filed in the U.S. District Court for the Eastern District of Virginia, and the Commission approved the stipulated final order by a 2‑0 vote.

The settlement focuses on unwinding a February 2025 agreement under which Zillow paid Redfin $100 million. Under that earlier deal, Redfin agreed to shut down its ILS business, exclusively repost Zillow apartment listings, transition its customers to Zillow, and remain out of the ILS market for up to nine years.

Under the proposed order, the February 2025 arrangement is effectively rolled back. Redfin is required to reenter the ILS market and restart its rental advertising business within six months. The company must make enforceable, multiyear commitments to invest tens of millions of dollars so that it becomes a stronger competitor in rental listings.

The order also removes contractual restrictions that had limited Redfin’s ability to compete in rental advertising. These changes are intended to enable Redfin to operate a standalone rentals platform while continuing to serve renters and landlords who previously relied on its ILS services.

To facilitate Redfin’s reentry, the order requires Zillow to waive noncompete and anti‑poaching impediments that could hinder Redfin from recruiting Zillow employees. This provision is aimed at allowing Redfin to hire management, sales and support staff needed to rebuild its rental advertising operations. In addition, certain ILS customers will have a nine‑month window after Redfin’s relaunch to renegotiate their contracts, creating an opportunity to reassess service and pricing options.

The order’s terms will remain in effect for 10 years, providing a long period of oversight for the companies’ conduct in the rental ILS market. The settlement includes no admission of liability or wrongdoing by Zillow, even as it imposes behavioral commitments designed to address the FTC’s competition concerns.

Redfin has stated that, under the resolution, it can maintain its rental partnership with Zillow through at least 2030. At the same time, it plans to build and invest in a standalone rentals business that complies with the requirements of the order. This dual approach allows Redfin to continue collaborating with Zillow on rentals while reestablishing its own presence in the ILS market under the new regulatory framework.