FFS Insights · Antitrust and Competition · August 2026
General information, not legal advice. This article discusses a public enforcement action and does not reflect the representation of any party.
On August 24, 2026, the Federal Trade Commission and five states settled an antitrust case against Zillow and Redfin, two of the largest online rental-listing companies in the country. The settlement resolves a lawsuit over a February 2025 deal in which Zillow paid Redfin $100 million. In return, Redfin agreed to shut down its rental-advertising business, move its customers to Zillow, and stay out of the market for as long as nine years. See FTC v. Zillow Group, Inc., No. 1:25-cv-01638 (E.D. Va. filed Sept. 30, 2025).
The government’s objection was direct. You cannot pay a competitor to stop competing. What makes the case worth studying is less the theory, which is well settled, than the remedy, which is ambitious. Rather than simply forbidding the arrangement, the order requires Redfin to rebuild and re-enter the market within six months, and it requires Zillow to help.
The companies saw it differently, and they had more than a talking point. They argued that the arrangement was a procompetitive syndication partnership that gave renters more choice and property managers cheaper access to leads, that the government had drawn the market too narrowly, and that nothing about the deal fit the categories courts condemn without a trial. The case settled on the eve of a bench trial, before the court ruled on any of it. No judge found a violation, and the companies admitted none. The outcome is better read as a negotiated reset than as a courtroom defeat.
For anyone who structures deals between companies that compete, or who advertises on the platforms that dominate a market, the case is a concrete guide to where the lines fall and to how hard they can be contested. The sections below walk through the market, the three theories the FTC pleaded, the doctrine behind each, the defense’s response, the remedy, and the practical lessons.
The market and the deal
Internet listing services, or ILSs, are the sites renters use to find apartments and the sites property managers pay to advertise vacancies. The FTC identified three leading national networks: Zillow, CoStar, and Redfin. It alleged that the three together account for more than 85 percent of nationwide rental-listing advertising revenue, in a market it described as already highly concentrated.
Against that backdrop, the FTC alleged, Zillow and Redfin signed two contracts in February 2025. One paid Redfin $100 million to wind down its rental-advertising business, transfer its customers, and help Zillow hire the salespeople Redfin was about to let go. The other had Redfin display only Zillow’s listings and agree not to compete for advertising customers for up to nine years. A detail from the filings captures the government’s theory. Zillow recorded the $100 million on its own securities filing as an intangible asset labeled “customer relationships,” which the FTC used to argue that the deal was, in substance, a purchase of a rival’s business.
Three theories of liability
The FTC did not rely on a single legal hook. It pleaded the same conduct three ways, a common belt-and-suspenders approach that lets a plaintiff win even if one theory falters.
First, an unlawful agreement in restraint of trade under Section 1 of the Sherman Act, 15 U.S.C. § 1, enforced as an unfair method of competition under Section 5 of the FTC Act, 15 U.S.C. § 45. Second, an unlawful acquisition under Section 7 of the Clayton Act, 15 U.S.C. § 18, on the view that Zillow had bought Redfin’s business (its customer relationships, key employees, and business information). Third, a standalone unfair method of competition under Section 5 of the FTC Act. The agency brought the suit in federal court under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), which lets it seek an injunction without first running its in-house administrative process.
Why paying a rival to exit is treated so harshly
Most conduct that touches competition is judged under a fact-intensive balancing test called the rule of reason. A narrow set of practices are treated far more severely, because experience shows they almost never help competition. Agreements among competitors to fix prices, rig bids, or divide markets fall in that category, and courts often condemn them with little further inquiry. See United States v. Topco Associates, 405 U.S. 596, 608 (1972) (horizontal territorial limitations “are naked restraints of trade with no purpose except stifling of competition”).
Paying a competitor to leave a market, or to stay out of one, is a form of market division. The Supreme Court confronted a close analogue in Palmer v. BRG of Georgia, Inc., 498 U.S. 46 (1990) (per curiam), where two bar-review companies agreed that one would keep a territory and pay the other to stay away. The Court called the arrangement “unlawful on its face.” Id. at 49-50. Years later, in FTC v. Actavis, Inc., 570 U.S. 136 (2013), the Court explained that paying a rival to stay out of a market can violate the antitrust laws, and that a large, unexplained payment to keep a competitor away is itself strong evidence of market power and anticompetitive purpose. As the Court described the pattern, a party “with no claim for damages … walks away with money simply so it will stay away.” Id. at 151. Collusion, the Court has said, is “the supreme evil of antitrust.” Id. at 148 (quoting Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004)).
Where a restraint is not automatically condemned, courts sometimes apply an abbreviated review known as a “quick look,” available when “an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets.” California Dental Ass’n v. FTC, 526 U.S. 756, 770 (1999). The FTC’s complaint tracked this spectrum. It alleged the deal was inherently suspect and required “no elaborate analysis,” and it pleaded the full rule of reason in the alternative. That is the cautious way to frame a market-allocation claim after decades of doctrinal fine-tuning.
The label the companies chose for their deal, a “partnership,” did not resolve the question. Antitrust looks at economic substance. A genuine content-syndication arrangement can be lawful, even procompetitive. A payment that also buys a competitor’s exit is a different matter, and it draws the most skeptical review the law provides.
The acquisition theory and the structural presumption
The Clayton Act count added a second, independent path. Section 7 reaches an acquisition whose effect “may be substantially to lessen competition,” and a long line of authority lets the government rely on market structure to make its case. A transaction that produces “an undue percentage share of the relevant market” and “a significant increase in the concentration of firms” is presumed to harm competition unless the defendant shows otherwise. United States v. Philadelphia National Bank, 374 U.S. 321, 363 (1963). The FTC invoked that presumption with concentration figures well above the thresholds in the federal Merger Guidelines.
One feature of the deal made the Section 7 theory notable. The transaction was structured so that it did not require pre-merger notification under the Hart-Scott-Rodino Act, 15 U.S.C. § 18a, and it was cast as a partnership and a content license rather than an acquisition. The FTC’s position was that a deal can eliminate a competitor, and violate Section 7, whether or not it ever crossed a reporting threshold.
Market definition and two-sided platforms
Market definition is often the hardest part of a digital-platform antitrust case, and the governing precedent is Ohio v. American Express Co., 585 U.S. 529 (2018). There the Court held that certain two-sided platforms, where a sale to one side is impossible without a simultaneous sale to the other, must be analyzed as a single market spanning both sides. The Court drew a careful distinction, though. Two-sided platforms that sell advertising, such as newspapers, generally do not work that way, because readers are largely indifferent to how much advertising a paper carries. Such advertising platforms behave like one-sided markets and are analyzed as such.
That distinction shaped the Zillow-Redfin complaint. An ILS is an advertising platform, and the FTC defined the relevant market on the advertiser side, alleging that the core function of an ILS is connecting advertisers with renters rather than intermediating a lease. Reading the complaint against American Express, the drafting looks deliberate. The agency pleaded the market the way the case permits for advertising platforms, which is a useful reminder that market definition is won or lost in the pleadings.
The defendants contested that framing at summary judgment, and the dispute was real. They argued that non-ILS advertising, including search engines like Google and social media, competes for the same property-manager budgets and belongs in the market, which would make the market far less concentrated than the government claimed. They also argued that renters cannot be written out of the analysis. An ILS, on their view, is a two-sided platform whose two audiences are inextricably linked, so American Express required the court to weigh effects on renters and not only on advertisers. Market definition, they contended, was a fact-intensive question for trial rather than something to resolve on the papers. The court never decided who was right.
The defense had a serious case
Because the matter settled, none of the government’s theory was tested to judgment. The defendants’ summary-judgment arguments deserve to be taken seriously, both because they were substantial and because they shape what the settlement does and does not stand for.
The companies first argued that the wrong legal test was being assumed. The rule of reason, not quick-look condemnation, is the default, and quick look is reserved for restraints courts have seen often enough to condemn with confidence. Exclusive syndication of listings, they argued, is common in the industry and has helped smaller listing services compete by giving them more inventory, so it is not the kind of naked restraint that fails on sight.
They also pointed to real-world results. Zillow and Redfin argued that although the government brought the case in the name of protecting renters, it “failed to develop any evidence of renter harm,” even as the government asked the court to exclude renters from the relevant market and disregard the partnership’s effects on them. The companies argued that an ILS is a two-sided platform on which renters’ and property managers’ interests are inextricably intertwined, and as a result, the government could not simultaneously ignore the renter side of the platform and carry its burden of proving anticompetitive effect under Ohio v. American Express. In addition, by the time the motion for summary judgment was filed, the arrangement had run for more than a year, and the companies argued the record showed procompetitive effects. Renters saw more listings and more choice, and property managers got more leads and more leases at lower cost. Under American Express, a restraint’s actual effect on competition is the center of the inquiry, and effects that benefit consumers cut against liability.
Finally, they argued the Clayton Act count did not fit. The structural presumption that a highly concentrated deal is likely to harm competition was built for horizontal mergers that combine two independent firms. This arrangement, the companies argued, was not a merger. It touched one side of a two-sided platform, left Redfin competing for renters and web traffic, and was time-limited. A court, they said, would still have to weigh the totality of the circumstances rather than presume harm from market shares alone.
None of these arguments was resolved. A reader should treat the settlement as the government’s enforcement position, confirmed by a negotiated outcome, rather than as a judicial finding that the defenses failed.
The remedy, and why there is no fine
Readers sometimes expect a large monetary penalty in a case like this. None was paid to the FTC, and the reason is a point of law worth understanding. The agency sued under Section 13(b), which the Supreme Court held authorizes court orders, not monetary relief such as restitution or disgorgement. See AMG Capital Management, LLC v. FTC, 593 U.S. 67 (2021). So the agency sought the strongest structural order it could obtain instead of a fine. The $2 million that changed hands went to the participating states for their costs, and the order describes it as not a penalty. The companies admitted no wrongdoing.
The order itself, which runs for ten years, is the most instructive part of the settlement. It strips out the terms that kept Redfin on the sidelines. It then requires Redfin to re-enter the market within six months, complete with a working listings portal, a billing system, a general manager, a trained sales and support team, and advertising to win customers back, with escalating penalties and then contempt for missing the deadline. It also enlists Zillow to help its returning rival: Zillow must let Redfin interview and hire Zillow employees, waive non-compete and no-poach terms that would block those moves, refrain from retaliation or counteroffers, and, for nine months after Redfin re-enters, let locked-in customers renegotiate or leave without penalty so they can move to Redfin.
Is a remedy like this new? The building blocks are familiar, but the combination is not. Employee-transfer provisions, non-compete waivers, no-solicit bars, and customer-unlock terms are standard hardware in merger-divestiture settlements, where the agency helps the buyer of a divested business compete. Freeing workers from no-hire restraints and requiring notice that the restraints are void also tracks recent FTC labor enforcement. Antitrust has a long history of requiring a dominant firm to enable rivals, whether through compulsory access to a shared facility, see United States v. Terminal Railroad Ass’n of St. Louis, 224 U.S. 383 (1912), or through compelled patent licensing, as in the 1956 AT&T consent decree, and it has restructured whole industries through divestiture, see United States v. American Telephone & Telegraph Co., 552 F. Supp. 131 (D.D.C. 1982). What is uncommon here is the affirmative command that a defendant rebuild and re-enter a market it had exited, on a deadline, with the other party required to help. Those older remedies share an existing asset or move assets to a new owner. They do not order a company to reconstruct a business it dismantled. Research did not locate a prior antitrust order combining compelled re-entry with this kind of facilitation, so the fair description is an unusually reconstructive remedy, assembled from familiar tools and used in an unfamiliar place, rather than something never done before.
One point often gets lost in the coverage. Zillow and Redfin remain partners. The settlement did not end their relationship or force a divestiture. Zillow must keep syndicating its listings to Redfin, so Redfin’s sites still carry Zillow’s inventory. What changed is that Redfin is now free to compete alongside that arrangement. It can sign its own advertising customers and display listings that are exclusive to Redfin, rather than serving only as a mirror of Zillow. The order stripped out the exit and exclusivity terms that had turned a syndication deal into a market-allocation problem, while leaving the syndication itself in place.
What the settlement signals for the industry
Several practical lessons follow for companies, advertisers, and the lawyers who advise them.
Deal structure does not immunize substance. This transaction was not large enough to require pre-merger notification, and it was framed as a partnership and a content license. The FTC treated it as an acquisition and a naked restraint, though the companies disputed both characterizations and the case settled before a court weighed in. Competitors contemplating syndication, content, or partnership agreements should expect the agency to look past the caption to what the deal does to rivalry.
Terms that suppress a competitor are the danger zone. A syndication deal that expands where listings appear is one thing. A deal that also pays a rival to exit, hands over its customers, and keeps it out for years is another. Exit-and-stay-out terms, exclusivity that forecloses competition, and transfers of competitively sensitive information are the features that turn a commercial arrangement into an enforcement target.
Labor terms are part of the antitrust picture. The original deal used non-compete waivers to help one company absorb the other’s salesforce, and the remedy reversed that mechanism to help the returning competitor rehire. Restrictions on worker mobility increasingly draw antitrust attention on their own, and they can aggravate a competition problem that begins elsewhere.
Housing and digital platforms remain priorities. The agency has repeatedly emphasized competition in housing and in the online tools people use to find homes. A deal at the intersection of digital platforms and the rental-housing market sits squarely within that focus.
How FFS can help
Fridman Fels & Soto represents clients in Department of Justice antitrust investigations. It also represents Plaintiffs injured by anticompetitive conduct. If you are under investigation by the government, our team can help you assess the exposure and structure a path forward.
This article is provided for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Antitrust outcomes turn on specific facts. Consult qualified counsel about your situation.
Frequently Asked Questions
Is it actually illegal to pay a competitor to leave a market?
When competitors agree that one will exit or stay out in exchange for payment, that is potentially a form of market allocation, which the antitrust laws treat as among the most serious violations. The Supreme Court struck down a payment-to-stay-out arrangement in Palmer v. BRG of Georgia, Inc., 498 U.S. 46 (1990) (per curiam), and it recognized in FTC v. Actavis, Inc., 570 U.S. 136 (2013), that paying a rival to stay out of a market can be unlawful. Whether any particular arrangement crosses the line depends on its facts.
Does the settlement mean Zillow and Redfin broke the law?
No court decided that question. The companies deny wrongdoing, and a settlement resolves the dispute without any admission of liability. What the public record shows is what the government alleged and what the companies agreed to do going forward.
What did Zillow and Redfin argue?
They argued the arrangement was a procompetitive syndication partnership rather than a scheme to eliminate competition. In their summary-judgment briefing they contended that the government defined the market too narrowly by excluding search and social-media advertising and by writing renters out of a two-sided platform, that exclusive syndication is common and beneficial in the industry, and that the record after more than a year showed more choice for renters and lower costs for property managers. The court did not rule on these arguments before the case settled.
Why did the FTC not collect a large penalty?
Because it sued under Section 13(b) of the FTC Act, which the Supreme Court held in AMG Capital Management, LLC v. FTC, 593 U.S. 67 (2021), allows the agency to obtain court orders rather than money. The agency’s leverage in this kind of case is the injunction, so it sought a structural remedy that restores competition. The states received $2 million for their costs, which the order describes as not a penalty.
How can the FTC attack a deal that was too small to report?
Section 7 of the Clayton Act, 15 U.S.C. § 18, reaches acquisitions that may substantially lessen competition whether or not they required pre-merger notification under Hart-Scott-Rodino. A deal that eliminates a competitor can be challenged after the fact, and the government can rely on market concentration to raise a presumption of harm. See United States v. Philadelphia National Bank, 374 U.S. 321, 363 (1963).
Why does market definition matter so much in cases like this?
Because the analysis usually cannot proceed without it. For digital platforms, the controlling decision is Ohio v. American Express Co., 585 U.S. 529 (2018), which treats certain two-sided platforms as a single market spanning both sides, while analyzing advertising platforms as one-sided. How a market is defined often decides who wins.
Has a remedy like this been used before?
The tools are familiar, but the combination is not. Employee releases, non-compete waivers, and customer-unlock terms are established features of merger settlements, and antitrust has long required dominant firms to share assets with rivals through compulsory licensing and mandatory-access orders. What is uncommon here is the order directing a company to rebuild and re-enter a market it had left, on a deadline, with the other party required to help. It is better described as an unusually reconstructive remedy than as something never done before.
We are considering a partnership or syndication deal with a competitor. What should we watch for?
The risk rises sharply when a deal does more than share content or distribution. Terms that pay a competitor to reduce or stop competing, lock in exclusivity that forecloses rivals, transfer competitively sensitive information, or restrict employees from moving between the companies are the features regulators scrutinize most. Deals below the merger-notification thresholds are not beyond reach. It is worth building an antitrust review into the deal process early, while terms can still be adjusted.
Does this affect renters and property managers directly?
The government’s theory is that a market with three strong competitors serves advertisers and renters better than one with two, through lower advertising costs and more innovation. The order is built to bring a third competitor back. The companies took the opposite view, arguing that the partnership had already widened renters’ choices and lowered costs, which is one reason the market impact was sharply disputed. Whether the settlement translates into better prices and service depends on how vigorously the market responds.
Are Zillow and Redfin still working together?
Yes. The settlement did not break up their relationship or order a divestiture. Zillow must continue syndicating its listings to Redfin, so the companies still share inventory. The difference is that Redfin is now free to compete at the same time, signing its own advertising customers and carrying listings exclusive to Redfin rather than mirroring Zillow. The order removed the exit and exclusivity terms that concerned the government while leaving the underlying syndication in place.
