Zillow Paid $100 Million to Make Its Only Rival Disappear. Prices Rose 14.5%. The 'Fix' Doesn't Land Until 2027.

Zillow paid $100 million to make its only real rival disappear. It worked — prices went up 14.5%.

On Monday, hours before a federal trial was set to begin, Zillow and Redfin settled with the Federal Trade Commission over a 2025 deal the government says was an illegal payoff to kill competition in rental listings. Zillow paid Redfin $100 million to shut down its own listings business, hand its customers to Zillow, and stay out of the market for up to nine years. Regulators say it worked exactly as designed: landlord ad prices rose an estimated 14.5% per listing after Redfin stopped competing.

That's not a hypothetical harm from a merger review. That's a real, measured price increase, cited by the government's own expert, tied directly to one company paying another to leave the field. If you manage or invest in multifamily property and you've felt like online listing advertising got more expensive and less negotiable over the last year and a half, you weren't imagining it — you were paying the toll on a market that had been reduced from three real competitors to two by a check.

The settlement gets framed everywhere as a win for competition: Redfin comes back, prices should fall, case closed. Read the actual terms and a different story shows up. The "fix" doesn't require Redfin to be a real competitor again for six months. It doesn't require prices to move at all. And the deal that created the problem — Zillow and Redfin's underlying content-sharing partnership — doesn't end. It runs through at least 2030, government order or not.

What actually happened, and what the order actually requires

In February 2025, Zillow and Redfin — the two biggest players in rental internet listing services (ILS), the category that also includes CoStar as the third major network — struck a deal. Redfin agreed to wind down its own rental-ads business (Rent.com, ApartmentGuide.com), mirror Zillow's listings instead, transfer its advertising customers to Zillow, and stay out of the ILS market for up to nine years. In exchange, Zillow paid Redfin $100 million plus a fee for every renter lead generated.

The FTC sued in September 2025, calling it an illegal pay-to-exit arrangement. Five states — Arizona, Connecticut, New York, Virginia and Washington — filed their own suit the following month; the cases were merged in November 2025, and a judge rejected the companies' motion to dismiss in May 2026, per the same Multifamily Dive timeline. The case was headed to trial Monday morning when the settlement landed instead — TechCrunch reported the deal was struck as the trial was scheduled to start, which is usually a sign one side didn't like its odds.

The order is in place for 10 years. It strips out the anticompetitive terms — Redfin can now sell its own advertising and doesn't have to hand Zillow sensitive business data — and requires Redfin to relaunch its ILS business within six months of the order being finalized, complete with its own general manager, sales team and support staff. Zillow has to let Redfin recruit its employees without noncompete restrictions, and for nine months after Redfin relaunches, Zillow must let any advertiser stuck in a long contract renegotiate for free. FTC Bureau of Competition director Daniel Guarnera called the underlying arrangement a straightforward violation: "This kind of payment to a competitor to exit a market and stop competing violates the antitrust laws," he said in the agency's release. New York Attorney General Letitia James added that the case restored access to "critical tools that New Yorkers rely on to find affordable homes," per CNBC.

Notice what the order does not do. It doesn't fine Zillow a dollar for the $100 million payment. It doesn't force the companies to unwind their listing-syndication partnership — that continues at least through 2030. It doesn't require ad prices to come down; it requires a competitor to exist again, on a six-month clock, and trusts the market to do the rest.

The Numbers

• $100 million — what Zillow paid Redfin in February 2025 to exit the rental-ILS market, per the FTC's complaint and order.
• Up to 9 years — how long Redfin agreed to stay out of the business it just got ordered back into.
• 14.5% — the average increase in what Zillow's advertising customers paid per listing after Redfin stopped competing, according to an expert retained by the FTC and the states, cited by CNBC.
• 6 months — the deadline for Redfin to relaunch its ILS business once the order is finalized. Not "immediately." Not "before the settlement is announced." Six months from finalization, per the FTC order.
• 10 years — the length of the FTC's order itself, versus the 9 months Zillow has to let advertisers out of bad contracts penalty-free.
• ~4x and ~40% — Zillow's own counter-numbers: it says multifamily listings on Redfin's sites nearly quadrupled and listings on its own sites grew almost 40% since the partnership began, framing the arrangement as pro-consumer rather than anticompetitive, per Multifamily Dive. That's a real number — it's also a volume stat, not a price stat, and it doesn't rebut the 14.5% figure at all.

Common Mistakes Investors Make Here

• Assuming "settlement" means "prices drop now." The order fixes the rules of the game. It doesn't touch what you're paying for a listing tomorrow morning, and won't until Redfin actually rebuilds a sales force and a customer base from zero.
• Reading Zillow's growth stats as a rebuttal to the price stat. More listings and more leads can coexist with higher unit prices — that's not a contradiction, that's what happens when the buyer has fewer places to shop.
• Forgetting Redfin already chose the payout once. The company that's now required to become an aggressive #2 competitor is the same company that took $100 million rather than compete the first time. A court order can force it to hire a sales team; it can't force ambition.
• Underwriting today's deals on the assumption that ad costs revert immediately. If your multifamily model already baked in cheaper lease-up marketing because "the FTC fixed it," you're pricing in relief that's contractually still a year or more away.

Where I Land

The order is a legitimate win on paper and a slow one in practice, and both things are true at once. Zillow paid to make a competitor vanish, got caught, and the fix for that costs it nothing but paperwork and patience — the underlying content deal that made Zillow the default rental-search product for most of the country runs through 2030 no matter what Redfin does. I wouldn't underwrite a single multifamily deal today assuming lower ILS advertising costs — the relief clock hasn't even started, and it's tied to a company whose only prior move in this market was to take the money and leave. My call: by the end of 2027, once both companies are running standalone advertising products again, per-listing ad prices in the markets where Redfin actually shows up will have fallen meaningfully — but in the markets where it doesn't bother building a real sales presence, Zillow's pricing power will look almost exactly like it does today. The fix works where Redfin decides to fight. It's optional everywhere else.

How to Use PropGPT for This

"Pull multifamily properties (25+ units) in [metro] currently listed only on Zillow-family sites (Zillow Rentals, Trulia, HotPads), sorted by days-on-market, so I can see where advertising exposure — and cost — has been concentrated in a single network." This flags the properties most exposed to the pre-settlement pricing environment, and the ones most likely to benefit first when Redfin actually relaunches.

"Re-run the leasing and marketing cost assumptions on [specific deal/address] under two scenarios: current ILS ad pricing, and a 10-15% reduction reflecting a restored competitor. Show me the IRR delta." Tests whether your underwriting is quietly assuming relief that hasn't arrived yet — and how much your return actually depends on it.

"Find multifamily submarkets where CoStar has meaningful listing share alongside Zillow, versus submarkets where Zillow is effectively the only network being used." CoStar is the FTC's third leg of this market. Markets where it already competes hard are the ones where you have real alternatives right now, not in six months.

"Build a watchlist of my portfolio's active listings and flag any that are on contracts I can't cancel within 3 months — I want to know which of these qualify for penalty-free renegotiation once Redfin re-enters." The FTC's order gives existing Zillow advertisers a 9-month renegotiation window after Redfin relaunches. This turns a legal footnote into a calendar reminder.

"Summarize any new multifamily deal I'm underwriting in plain terms: does the leasing/marketing cost assumption depend on rental-ILS ad prices falling in the next 12 months? Yes or no, and by how much." A fast gut-check before you commit capital to a thesis that assumes a court order moves faster than the company it applies to.

The Bottom Line

The FTC just proved, with a number, what a lot of property managers already suspected: pay off your only real competitor and prices go up 14.5%. That's a genuinely useful data point for anyone who's felt squeezed on listing costs over the last year. But the fix the government negotiated runs on Redfin's clock, not yours — six months to relaunch, longer to actually compete, and a partnership with Zillow that survives all of it through 2030. Treat this as a "watch and verify" story, not a "cost relief incoming" one. Screen for where competition is already real, not where a settlement says it's supposed to show up eventually.

This is reporting and analysis, not financial or legal advice.