FTC Proposes Unwinding Zillow-Redfin Multifamily Ad Deal

The FTC and five state attorneys general filed a proposed settlement in the Eastern District of Virginia that would unwind core terms of Zillow's $100 million arrangement with Redfin. The complaint alleges the deal paid Redfin to exit the multifamily rental-advertising market, transfer customers and employees to Zillow, and refrain from competing for up to nine years. Under the proposed order, Redfin must rebuild an independent multifamily rental marketplace within six months; Zillow must lift re-entry restrictions, facilitate customer and employee transitions, and abandon specified hiring restraints. The action signals that the FTC and state enforcers will scrutinize competitor partnerships and licensing arrangements under Section 7 and the Sherman Act even when the transaction falls below HSR thresholds. The conduct remedies, including mandatory divestiture-style rebuild of a competing platform, show enforcers' willingness to reconstruct lost competition rather than rely solely on financial disgorgement. Sophisticated counsel advising on strategic alliances, data-sharing deals, and non-compete provisions should expect heightened antitrust diligence and remedy risk. Watch the Eastern District of Virginia's public-comment period and any litigation over the proposed order's scope, particularly the hiring-practice limits and customer-transfer mechanics.