The Federal Trade Commission just dropped a bombshell lawsuit against Zillow and Redfin, alleging their February partnership was actually an illegal scheme to eliminate competition in the rental listings market. The FTC claims Zillow paid to essentially dismantle Redfin's rental business while disguising it as a partnership, potentially driving up costs for landlords and reducing options for renters nationwide.
The rental hunting game just got a lot more complicated. The Federal Trade Commission is taking aim at what it calls one of the most brazen attempts to corner the online rental market in recent memory, filing suit against Zillow and Redfin over a deal that regulators say was designed to eliminate competition rather than help renters.
The trouble started in February when the companies announced what looked like a straightforward partnership. Zillow would pay Redfin to syndicate rental listings across their respective platforms, theoretically giving renters more options and landlords broader reach. But according to FTC documents filed today, what actually happened was far more troubling.
"Paying off a competitor to stop competing against you is a violation of federal antitrust laws," the FTC's Director of the Bureau of Competition said in announcing the lawsuit. The agency alleges that Zillow essentially bought Redfin out of the rental market for up to nine years, then tried to hide the acquisition behind partnership language to avoid regulatory scrutiny.
The mechanics of the deal reveal just how calculated this allegedly was. Redfin agreed to terminate existing advertising contracts with rental property managers and transfer those relationships directly to Zillow. Even more telling, the FTC claims Redfin laid off hundreds of workers in its rental division, then helped Zillow recruit the employees it wanted to keep.
This wasn't Zillow's first rodeo in market consolidation. The company already controls a sprawling network of rental platforms including Trulia, HotPads, and StreetEasy. With Redfin's Rent.com and ApartmentGuide now effectively under its umbrella, plus a separate partnership with Realtor.com inked in 2024, has assembled what the FTC calls control over "the vast majority of rental listings online" for larger apartment complexes.
