FTC Places Redfin Back on the Market, Reverses Agreement With Zillow

On August 24, 2026, the Federal Trade Commission (FTC), along with five state attorneys general,¹ filed a proposed settlement requiring Zillow Group, Inc and Zillow, Inc (collectively Zillow) and Redfin Corporation (Redfin) to unwind a $100 million “pay-a-rival-to-exit” deal and restore Redfin’s online marketplace for multifamily rental properties.² If accepted by the Eastern District of Virginia, the order would resolve the FTC’s antitrust challenge to an arrangement between two of the largest operators of online rental marketplaces where landlords and property management companies pay to advertise vacant units and where renters search for housing.³ The government alleged that Zillow paid Redfin to shut down its multifamily rental-advertising business, transfer its customers and salesforce to Zillow, and agree to stay out of the market for up to nine years.⁴ The FTC’s approach — challenging the arrangement as an anticompetitive agreement and acquisition — was solved with an unusual remedy. In lieu of a conventional divestiture, the settlement requires the parties to undo certain restraints and compels Redfin to rebuild an independent, competing online rental listing marketplace for multifamily properties.

Background

The lawsuit⁵ stemmed from two contracts — a Partnership Agreement and a Content License Agreement — executed by Zillow and Redfin in February 2025.⁶ Under these agreements, according to the FTC, Zillow paid Redfin $100 million to terminate its multifamily property advertising contracts, use “reasonable best efforts” to move those customers to Zillow, share competitively sensitive information, and help Zillow hire many of Redfin’s soon-to-be-terminated employees. Redfin agreed, among other things, to display Zillow’s multifamily rental listings (making Zillow the exclusive provider of multifamily listings on Redfin’s sites) and to stay out of the market for up to nine years.⁷ Redfin began deactivating listings on its sites in June 2025 for customers who did not transition to Zillow and dismantling services related to its multifamily online listing business.⁸

The FTC’s Challenge

The FTC characterized the deal as a payment to a competitor to exit and stay out of a consolidated market. The government emphasized that both agreements expressly disclaimed any joint venture and cast the parties as “independent contractors,” and pointed out that Zillow categorized the payment on its SEC filing under “Intangible Assets” as “Customer relationships.”⁹ Although the arrangement was not a reportable acquisition under Hart-Scott-Rodino because it did not meet the size thresholds, the FTC alleged that Zillow’s purchase of Redfin’s customer relationships, key employees, and business information, amounted to an acquisition of assets that is presumptively unlawful under Section 7.¹⁰ The agency identified two possible nationwide markets: (1) Internet Listing Services advertising for rental properties, and (2) the narrower market for advertising to managers of multifamily rental properties (i.e., properties with over 25 units).¹¹

The Proposed Remedy

In an unusual move, the proposed settlement requires Redfin to reenter the business it discarded last year. The parties must eliminate any terms barring Redfin from owning and independently operating a rental-advertising internet listing service and limiting Redfin’s ability to display its own listings, remove the information-sharing obligations, and modify syndication payments to accommodate re-entry into the market.¹² For nine months after Redfin rebuilds its listings, Zillow must allow any of the affected advertisers whose contract cannot be canceled within three months to exit or renegotiate without cost or penalty in order to deal with Redfin, and must not otherwise impede customers from contracting with Redfin.¹³ Zillow must allow Redfin to evaluate and re-hire transferred employees without Zillow’s intervention for one year and Zillow may not solicit Redfin employees for two years.¹⁴

Redfin has six months to rebuild its services, including operating a working customer portal and billing system, hiring a General Manager, salesforce, and support team, and advertising to customers or face escalating penalties and contempt.¹⁵

Key Takeaways

Companies considering partnerships or licensing deals with competitors should consider the following:

• A deal need not be HSR-reportable to draw Section 7 scrutiny. The agreements here were not reportable under Hart-Scott-Rodino. Yet the government treated the partnership and licensing contracts as an asset acquisition and pursued it as presumptively unlawful. Companies should evaluate risk based on substance and competitive effect, not on its filing obligations or characterization of the deal.
• Exercise caution when partnering with a rival in a consolidated industry. The government emphasized that, “whether viewed as an agreement to stop competing or as the acquisition of a rival’s assets, the effect remains the same.”¹⁶ Commitments to non-compete provisions between competitors invite challenge as naked restraints, even when labeled as a partnership or licensing deal. This risk is amplified in markets where only a handful of companies claim most of the revenue.
• Transfers of sensitive information and personnel between competitors are red flags. The exchange of competitively sensitive business information and the coordinated hand-off of a rival’s salesforce featured prominently in the FTC’s theory of harm.
• Authorities may seek conduct remedies that reconstruct competition. The order to rebuild a competitor — with deadlines, capital commitments, hiring facilitation, and penalties — shows enforcers may be open to remedies other than divestiture to restore a market. The FTC implemented a similar remedy in 2011 following Cardinal Health’s acquisition of competitor Biotech’s nuclear pharmacies and subsequent closure of its own pharmacies in locations where both operated.¹⁷ The government required Cardinal Health to restore and sell those pharmacies, as well as remove other restraints relating to shared information, employee transfers, and customer contracts.
• State attorneys general are active co-enforcers. Five states joined the FTC and shared in the settlement, including a $2 million payment and continuing oversight rights.

Companies should treat the government’s challenge and proposed order as a signal that partnership and licensing agreements can create antitrust risk and engage antitrust counsel to evaluate such deals before adoption.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.