At 10 a.m. Eastern Time on Monday, August 24, portal rivals Zillow and Redfin will face a judge in Virginia federal court, and defend against allegations from the FTC that the two companies essentially agreed to a buy-out where Redfin would stop competing on rental listings in exchange for cash ($100 million to be exact) and shared revenue.
Filed in early 2025 in federal court in Washington, the lawsuit represents more high-profile scrutiny of alleged antitrust behavior in the real estate industry, which has been awash in these allegations for multiple years—both from law enforcement, as well as through private civil actions.
The FTC, joined by attorneys general in Connecticut, Washington, New York, Virginia and Arizona, are asking for a court order forcing Zillow to sell all the assets it acquired as part of the partnership and possibly divest other elements of its rental listing business. Zillow and Redfin have defended the partnership as pro-competitive and far from unprecedented in real estate.
Within the complex and technical legal arguments, there are important connections to bigger issues facing the industry. Maybe most notably, the FTC explicitly rejected the idea that having all listings on one platform is pro-competitive (for rentals at least).
Additionally, documents and communications unearthed in the lawsuit show that CoStar sought a similar partnership with Redfin to the one Zillow eventually closed, with the shadow of Google’s foray into real estate hanging over the discussions—something the whole industry is watching closely.
Here is the background and the latest, as the parties prepare for trial:
Internal communications show CoStar bid, consolidation push
While the partnership was only announced in early 2025, internal documents filed as part of the lawsuit show that Zillow was pursuing a very similar bid as early as the spring of 2023.
One document filed in court this week, dated May 2, 2023, and titled “Redfin + Zillow Rentals Deal Summary” seemed to indicate that the two companies were already engaged in discussions on both a rental partnership and a “syndication opportunity” for new construction listings. The $100 million offer was already seemingly on the table as well.
A separate internal Redfin document, not dated and heavily redacted but looking ahead at 2024 financials, showed a similar syndication offer from CoStar on the table. That would have included single-family rentals (the Zillow offer did not at the time), and at the top level include significantly more rental listings.
It wasn’t clear why the deal didn’t happen. An October 2024 email from then-Apartments.com President Fred Saint to Redfin Founder and CEO Glenn Kelman mentioned seeking a “win win on the rentals side,” and suggested Kelman reach out to “Andy”—presumably CoStar Founder and CEO Andy Florance.
A CoStar spokesperson did not immediately respond to a request for comment.
“As I said, I think Google is a real threat in our space and I am highly motivated to find ways to deliver more value to multi-family communities,” Saint wrote.
Zillow closes, defends the deal
According to the FTC, Zillow CFO Jeremy Hofmann suggested that his company pursue a “close to exclusive” deal with Realtor.com® that would pressure Redfin into coming “back to the table” if it didn’t agree to the partnership.
In that 2023 strategy document, Zillow wrote that the Redfin deal “offers clear strategic benefits” including “remolding the competitive landscape.” The huge increase in rental listings on its platforms could also help in “justifying a price increase” for Zillow’s existing rental programs.
Zillow did end up working with Realtor.com to syndicate rentals in a deal announced in 2024.
In the same May 2 document, Zillow also said its $100 million payment and estimated $311 million in revenue share could be invested in its own business.
“We are currently showing that we can add buildings at a pretty good pace even without accelerated spend,” Zillow said.
But the company added it “struggle(s)” to compete with other portals in the rental space, including “A.com” (presumably CoStar’s Apartments.com), Redfin and Realtor.com, even with lower prices and more unique users.
“Marketing spend or increased sales headcount could yield the same results as this deal with (Redfin), but could take years with a less certain outcome,” Zillow wrote.
One of the FTC’s central arguments will be that the Zillow-Redfin partnership was a buy-out rather than a syndication deal—that Zillow wanted to remove Redfin as a competitor that presented a real challenge in the rental market. Zillow has countered that Redfin’s rental business was floundering, losing money over multiple years and failing to add significant inventory.
Another central dispute in the trial is over whether the partnership raised prices for property owners advertising their rentals. The FTC pointed to the above communication and has also promised expert testimony demonstrating this, adding that once Zillow is not “under the shadow of litigation” it may increase prices further.
Zillow has disputed all this, additionally arguing that deals like the one with Redfin are common, and claiming that the partnership has created huge benefits for renters in terms of available listings, as well as more valuable leads for property owners.
“(T)he prices that matter to (property owners)—cost per lead and per lease—have decreased after the Partnership. Plaintiffs will not be able to prove that these quality-adjusted prices are likely to exceed pre-Partnership levels,” Zillow and Redfin wrote in a filing this week.
The lawsuit reflects broader disputes in real estate
Unlike for-sale inventory, which for years has remained broadly available on multiple platforms, rental listings are spread unevenly across a handful of websites and platforms. Many of those, including CoStar (owner of Apartments.com and other rental sites), Zumper and Apartment List, were subpoenaed by the FTC, though they are not parties to the lawsuit.
Responding to Zillow’s assertion that consolidated listings benefit the whole rental market, the FTC said the “logical conclusion” of that theory is that “renters would get the greatest ‘benefit’ if there were only one (internet listing service) in total.”
“If this theory holds, perhaps the next payment to exit will be from Zillow to CoStar,” the FTC wrote in a court filing this week. “This absurd result demonstrates why Defendants’ two-sided platform argument misapprehends the market dynamics in this case and the importance of free-market competition.”
While the current lawsuit is over the (arguably) very different rental market, the same debate is currently playing out in for-sale real estate. While Zillow and many other incumbents have defended the status quo of “transparency” and syndicating listings consistently across all platforms, some big brokerages and MLSs have argued that at least some competition—with exclusive listings not automatically syndicated everywhere—is healthy for the market.
