The Federal Trade Commission (FTC) announced on Monday that real estate companies Redfin and Zillow must amend a commercial agreement to resolve an antitrust lawsuit. The agency reached the settlement on the morning the case was scheduled to go to trial in a Virginia district court.
The FTC, an independent agency of the U.S. government tasked with consumer protection and antitrust enforcement, filed the lawsuit last year. The complaint alleged that a commercial deal between the two companies weakened competition in the home rental market and harmed consumers.
According to the FTC, Zillow paid Redfin $100 million to shut down Redfin's listing services for multifamily properties. Under the terms of the original deal, Redfin reportedly agreed to end its contracts with advertising customers, transfer them to Zillow, and exclusively repost apartment listings provided by Zillow.
The settlement requires the platforms to remove these provisions from their agreement. Redfin must reenter the market with more home listings, a move the FTC stated is intended to ensure renters have a wider selection. Redfin said the settlement allows it to continue a rental partnership with Zillow through 2030 while it builds its own standalone rentals business.
For the average renter, the concrete change will be an increase in the number and variety of home listings available on Redfin's platform as it restarts its independent rentals business. Property management companies, who previously had fewer options for advertising their listings due to the transfer of contracts to Zillow, will now have an additional marketplace to reach potential tenants. The FTC claims these changes will lead to more competitive advertising rates and rental prices.
The settlement sets a precedent for how the FTC monitors commercial partnerships between major digital platforms to ensure they do not result in market consolidation. By requiring Redfin to relaunch its advertising business, the agency is forcing the re-establishment of a direct competitor in the rental space. Redfin indicated it will begin investing in its standalone business while maintaining a modified partnership with Zillow through 2030. The specific dates for the full relaunch of Redfin's independent listings were not reported.