Price-fixing costs real estate agencies $4m
Two Hamilton real estate agencies have been ordered by the High Court at Auckand to pay a total of $4 million for price-fixing.
Lodge Real Estate has to pay $2.1m and Monarch Real Estate Ltd has to pay $1.9m for breaching the Commerce Act, the Commerce Commission said yesterday.
The saga began in 2013, when Trade Me put up its online property listing prices. A number of Hamilton real estate agencies met to discuss their responses.
The commission first filed court proceedings in December 2015 against 13 national and regional real estate agencies and three individuals for agreeing to pass on the costs of Trade Me’s pricing change.
A number of agencies admitted liability and paid penalties to the commission. Some topped $1m.
The penalties in the case totalled just under $23m.
Lodge and Monarch were penalised for their roles in co-ordinating the Hamilton regional response to Trade Me’s pricing decision, the commission said.
A director of Lodge and a director of Monarch did not have to pay a penalty, the High Court ruled, despite an earlier Court of Appeal finding, upheld in the Supreme Court, that they did engage in unlawful conduct.
The commission filed proceedings alleging price-fixing and anticompetitive behaviour in 2015 after the agencies decided they would no longer meet the costs of Trade Me property listings for their vendors. The seller of the property, or their agent, would pay.
The commission’s claims against Lodge and Monarch, and their directors, were dismissed by the High Court in 2017. In 2018, the commission successfully appealed to the Court of Appeal. The case then went to the Supreme Court, where Lodge, Monarch and their directors lost their long battle against the allegations.
‘‘It is not unusual for industries to experience price increases from suppliers, and this case illustrates how important it is that companies avoid any discussions with their competitors on how they could or should respond to such a change,’’ said commission chairwoman Anna Rawlings.
‘‘Cartels can harm consumers and business, by raising prices, restricting supply and changing the competitive dynamic between businesses.’’
From next April, cartel conduct will be a criminal offence, carrying a maximum of seven years’ jail.
‘‘We strongly urge businesses to familiarise themselves with the law and ensure they have processes in place to guard against collusion with their competitors,’’ Rawlings said.
From next April, cartel conduct will be a criminal offence, carrying a maximum of seven years’ jail.