Redfin will relaunch its apartment listings business as part of a settlement agreement with federal regulators following a lawsuit that alleged it stayed out of the market in exchange for $100M from Zillow Group. 

The Federal Trade Commission and five state attorneys general reached the deal with Redfin and Zillow after the online apartment and home listings platforms agreed to end a partnership that gave Zillow exclusive apartment listing rights on Redfin’s website. Redfin will continue showing Zillow listings but also expand its platform into a full-fledged competitor, or face fines from the FTC.

This week’s deal amounts to some of the strongest action the FTC has taken to ensure competition, said Daniel Fridman, managing partner at white-collar defense firm Fridman Fels & Soto. As part of the settlement, Redfin will have the opportunity to interview and hire Zillow employees to support the new platform.

“I have looked and have not found a settlement that's been as aggressive as that, kind of forcing your rival to help you rebuild your business,” Fridman said. 

The litigation stems from a February 2025 deal that made Zillow the exclusive provider of multifamily listings to Redfin and was pitched by the pair at the time as a boon for renters. Regulators saw it differently and sued in October, arguing that the deal to stop running Redfin's own apartment ads in exchange for the payout was anticompetitive. 

The settlement was announced just before a trial was set to start on Monday. It promises to restore Redfin, which is owned by Rocket Cos. Inc., as a competitive counterweight to ZIllow in the apartment marketplace. 

“Rocket and Zillow are also becoming more direct competitors, with each of them trying to control more of the consumer experience, whether it's rentals or home purchasing, and so it's a frenemy relationship around the rentals business for now,” said Stephen Sheldon, a research analyst at William Blair who covers Zillow. “But I do think they are competing with the same strategy, and so they are going to be going more head-to-head.”

Sheldon and other analysts at William Blair described the deal as an “incremental positive” for Zillow in a note to investors Monday, saying that it removed regulatory uncertainty while allowing Zillow to continue its partnership with Redfin, just without exclusivity.

For landlords, marketing apartments is unlikely to radically change, Sheldon said. 

“I doubt it changes much,” he said. “This agreement is really just preserving the status quo that's been the status quo for the last year.”

Zillow, whose stock rose 3% Monday after the settlement was announced, reiterated its 2026 outlook along with the deal announcement. Rocket was up modestly in Monday trading. 

Zillow will also be required to notify most of its customers that they can renegotiate their contract with the listings platform in light of the new marketplace competitor. 

“This unfair and anticompetitive agreement between two listing giants would have jacked up costs for property managers, and renters would have been the ones to pay the ultimate price,” Connecticut Attorney General William Tong said in a statement. “We sued, and today’s settlement forces a return to fair competition and choice.”

Tong was joined by attorneys general in Arizona, New York, Washington and Virginia in suing to block the deal.

Zillow said it was “pleased to have found a resolution” to the litigation while maintaining that the original partnership benefited consumers and wasn't anticompetitive.

“This resolution is a win for renters and multifamily housing providers,” Zillow Rentals Senior Vice President Michael Sherman said in a statement. “The data shows the pro-consumer and procompetitive benefits of this partnership. This positive resolution enables us to keep our energy on innovating for renters and property managers, and ultimately making renting easier, more affordable and better for everyone.”

Redfin is required to hire a general manager, salespeople and a customer service team to launch its reentry into the internet listing service business and to “invest millions of dollars to ensure Redfin will be a far stronger competitor than it was before the 2025 agreement,” the FTC said in a press release. 

The deal's provisions giving Redfin access to Zillow's staff and freedom to hire them, some of whom may have previously been Redfin employees who left when Redfin stopped competing on apartments, is rare and not something Fridman has seen in other settlements. 

“What was unusual, in my view, was basically affirmatively requiring Zillow to help Redfin reconstruct the business that it had basically turned over to Zillow for $100M,” he said.

Redfin also operates Rent.com and ApartmentGuide.com, while Zillow’s network includes Zillow Rentals, Trulia and Hotpads. The Redfin platforms will start directly competing with Zillow for apartment listings starting next year, Zillow said in its statement. 

Redfin called the deal a significant win for the company and consumers in a statement to Bisnow.

“Renting is the starting point for millions of people on the path to homeownership, and a foundational part of the Redfin journey,” a company spokesperson said in an email. “This agreement allows us to maintain our rental partnership with Zillow through at least 2030 while building and investing in a standalone rentals business of our own.”

The FTC had a strong theory for its case going into the trial, with just one obvious hurdle to clear to win, Fridman said: It wasn’t entirely clear that any consumers were harmed by the partnership, a facet that the government would have had to prove.

Fines weren’t on the table as part of the settlement. Federal prosecutors brought the case under charges that don’t include financial penalties, which in some ways maintains the status quo. Both platforms will continue to show each other’s apartment listings.

“The only difference is now they can also have their own exclusive listings that the other one doesn't have,” Fridman said.