Viriginia, Arizona, Connecticut, New York, and Washington state brough suit against Zillow and Redfin in the District Court for the Eastern District of Virginia in October 2025.  The plaintiff states allege that the defendants executed an illegal agreement under which Redfin exited the internet listing services (“ILS”) market for buildings with more than 25 units and transferred its customers to Zillow.  The complaint alleges that the agreement eliminates competition in the highly-concentrated multifamily ILS market in violation of Section 1 of the Sherman Act, or, if viewed as an acquisition, under Section 7 of the Clayton Act.

In December 2025, the plaintiff states’ case was consolidated with a separate lawsuit against the defendants filed by the Federal Trade Commission.

In May 2026, the court denied the defendants’ motion to dismiss.

In August 2026, the parties jointly moved the court to enter a Final Order for Equitable Relief which would require Redfin to re-enter the ILS market for market and Zillow to not impede those efforts, as well as take certain steps to make Redfin’s re-entry possible. The proposed Final Order would also require the defendants to make a $2 million monetary payment to the plaintiff states for attorneys’ fees and costs.