Real estate agencies fined $10m for price fixing
Four of the country's largest and most influential real estate agencies have been fined $9.825 million for price-fixing between 2013 and 2014.
National and regional offices of Barfoot & Thompson, Harcourts, LJ Hooker and Ray White were handed down the penalty in the Auckland High Court on Friday.
The commission says the companies breached the Commerce Act, by tall-agreeing to make vendors pay a listing fee to have their property advertised on Trade Me.
It claimed by doing so, the companies eliminated competition in the market but also exposed vendors to harm.
It is not known how many sales were affected by the arrangement.
"The agreement had the potential to affect a large number of transactions undertaken by ordinary New Zealanders when buying and selling houses," Judge Heath said in court.
In December 2015, the Commerce Commission filed court proceedings against 13 agencies at a national level and in the regions of Manawatu and Hastings.
Commission Chairman Dr Mark Berry says the national agreement was formed at a Property Page* board meeting, where the parties met to discuss a combined, industry-wide response to Trade Me changing its pricing model.
In 2013, Trade Me changed its fees from monthly subscription payment to a per-listing fee for property sales advertised on its website.
"Trade Me's change from a subscription-based pricing model to a per-listing fee meant real estate agencies faced substantially increased costs in order to list properties on the website," Dr Berry says.
"As national competitors with significant influence across the country, it was vital that each agency made its own decision on how it responded to Trade Me."
The respective penalties handed down by the Court are:
- Barfoot and Thompson: $2,575,000
- Harcourts Group: $2,575,000
- LJ Hooker: $2,475,000
- Ray White: $2,200,000
Each company reached separate agreements with the commission. Ray White faced a lower penalty because it did not enforce vendor funding.
*Property Page is an incorporated company owned by Barfoot & Thompson, Harcourts, LJ Hooker, Ray White and Bayleys. It owns 50 percent of property listing website realestate.co.nz, which is a competitor to Trade Me.