Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Va.: FTC sues Zillow and Redfin for suppression of rental advertising competition, (Oct 1, 2025)

By Justin Marcus Smith, J.D.

“Paying off a competitor to stop competing against you is a violation of federal antitrust laws,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition.

The FTC announced that it has filed a 90-page complaint for injunctive and other equitable relief against Zillow Group, Inc., Zillow, Inc (collectively, Zillow), and Redfin Corp. in the federal district court in Alexandria, Virginia. The FTC alleged Zillow and Redfin unlawfully agreed to remove competition from the already highly concentrated online rental advertising market, in violation of Section 1 of the Sherman Act and Section 7 of the Clayton Act. The FTC said the agreement started with a $100 million payment to Redfin to exit the Internet listing service (ILS) advertising market and transfer all pertinent Redfin multifamily advertising customers to Zillow. Redfin allegedly terminated hundreds of employees just after the announcement of the plan, agreed to help Zillow hire them, and turned over its most sensitive information, details redacted, to Zillow. The FTC alleged that syndication of copies of Zillow’s listings are all that remains of Redfin’s “previously growing” multifamily rentals business. The FTC said wholesale elimination of competition in this “highly concentrated” space will harm rental advertisers and Americans who rely on ILSs to find their next home. The FTC is seeking declaratory judgments for violations of the antitrust laws and injunctive relief including structural measures. The Commission vote authorizing the complaint was 3-0 (FTC v. Zillow Group, Inc., No. 1:25-cv-01638 (E.D. Va. Sept. 30, 2025)).

Zillow. The FTC described Zillow as a publicly-traded Washington company based in Seattle. It operates a network of rental advertising websites under brands including StreetEasy, HotPads, and Trulia (collectively, Zillow network).

Redfin. The FTC described Redfin as a wholly-owned subsidiary of Rocket Companies, Inc. (Rocket), a publicly-traded Delaware corporation based in Detroit providing fintech mortgage, real estate, and personal finance services, through various businesses. The businesses include Rocket Mortgage, Rocket Homes, Rocket Close, Rocket Money, Rocket Loans, and now Redfin.

According to the complaint, Rocket acquired Redfin on July 1, 2025. Redfin offers a network of digital marketplaces to allow prospective renters to discover available apartments and houses for rent. It operates Rent.com, its largest rental ILS, along with Redfin.com, Rentals.com, and ApartmentGuide.com (collectively, Redfin Network).

Before the alleged agreement with Zillow, Redfin operated complementary digital marketing solutions (DMS) including RentRep, a social media advertising tool, and other services like RentSearch, RentSocial, RentTarget, RentEngage, and Property Sites, as separate from Redfin’s ILS advertising offerings.

Challenged agreements. The FTC alleged Zillow and Redfin entered into two unlawful agreements on February 6, 2025: a partnership agreement and a content license agreement. The partnership agreement allegedly provided for Redfin to exit the multifamily ILS advertising market and transition its multifamily business to Zillow. The content license agreement allegedly provided for Redfin to stay out of the multifamily ILS advertising market for up to nine years and to use Zillow as its exclusive multifamily rental listing provider.

Although Zillow and Redfin may have called it a partnership, the FTC said the agreements themselves do not provide for a pooling of resources or a sharing of risks, and even disclaimed a partnership, embracing instead the label “independent contractors.”

Relevant markets. The FTC proposed two relevant product markets:

1. provision of ILS advertising for rental properties;

2. provision of ILS advertising for rental properties targeted by the defendants’ agreements, i.e., managers of rental properties 25 units or greater (i.e., multifamily advertising).

The FTC pleaded there are no interchangeable substitutes for ILS advertising, the overwhelmingly dominant way property marketers find qualified renters. ILS advertising services are distinguishable from other forms of advertising because they include rental property -specific user-friendly features and information about rentals. Search engine and social media marketing may be adjunct, but they do not meaningfully compete. A hypothetical monopolist could impose a small but significant non-transitory increase in price or worsening terms (SSNIPT) because advertising customers are unlikely to switch from ILS advertising to other advertising methods. The FTC defined the pertinent geographic market as no broader than the United States.

Concentration. The FTC pleaded the Herfindahl-Hirschman Index (HHI) measure of market concentration described in the 2023 U.S. Department of Justice and Federal Trade Commission Merger Guidelines is well over 2,500 for the ILS advertising and ILS multifamily advertising markets, indicating high concentration in each. Smaller relevant geographic markets within each are probably even more concentrated. The FTC alleged the two agreements at issue would increase the HHC well over 200 points in each relevant market, respectively.

Harm. The FTC pleaded that the allegedly unlawful agreements substantially lessen price and quality competition; eliminate substantial competition between two of the three leading providers of ILS advertising; and deprive Redfin customers of a marketing approach that includes Redfin, including its add-on DMS products like RentRep. Advertising customers may effectively face immediate price increases or worse quality service. The agreements destroy differentiation. The FTC contended the agreements do not have any procompetitive benefits.

Three counts. The complaint consists of three counts:

1. illegal agreement in violation of Section 1 of the Sherman Act and Section 5 of the FTC Act;

2. illegal acquisition in violation of Section 7 of the Clayton Act;

3. Unfair method of competition.

Relief sought. The FTC prayed for the following relief:

1. (B), and (C) respective declaratory judgments that the defendants’ course of conduct violates Section 1 of the Sherman Act and is therefore an unfair method of competition in violation of Section 5 of the FTC Act; violates Section 7 of the Clayton Act; and, violates Section 5 of the FTC Act;

1. entry of structural relief to cure, prevent, and undo competitive harm including divestiture measures or other relief sufficient to restore competition;

2. injunctive relief enjoining the anticompetitive conduct alleged;

3. entry of other preliminary per permanent equitable relief as necessary;

4. an order requiring periodic compliance reports to the FTC with monitoring obligations;

5. other just and proper relief.

The FTC did not demand a jury trial.

The Case is No. 1:25-cv-01638.

Judge: NA

Attorneys: Dennis Carl Barghaan, U.S. Attorney's Office, for the FTC.

Companies: Zillow Group, Inc.

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