By Ashley Young-
Four estate agents have been fined $400,000 were found to have broken competition law by agreeing to fix and maintain a minimum level of commission fees to be charged for the sale of residential properties over a period of almost 7 years.
The Estate Agents engaged in dubious arrangements that denied local residents the chance to shop around for the best possible commission rates when selling their homes.
The Estate agents fined by the Competiton Markets Authority (CMA)were Michael Hardy & Company (Wokingham) Ltd and Geocharbert UK Ltd – together known as Michael Hardy,(pictured) ii) Prospect Estate Agency Ltd and Prospect Holdings (Reading) Ltd– together known as Prospect, iii) Richard Worth Ltd (in administration) and Richard Worth Holdings Ltd – together known as Richard Worth, and iv) The Romans Group (UK) Ltd and Romans 1 Ltd – together known as Romans.
This was the CMA’s third infringement finding in the real estate sector in recent years.In 2017, the CMA found that a group of Somerset estate agents had agreed to fix the minimum prices of their commission rates for the sale of residential properties. This meant that local home owners were denied the opportunity of getting the best possible deal when selling their property
The price fixing arrangement took place between at least September 2008 and May 2015. During this time, the estate agents conspired to set and maintain minimum commission rates for the sale of residential properties in Wokingham, Winnersh, Crowthorne, Bracknell and Warfield. Although the estate agents were relatively small businesses, they were leaders in the Berkshire area’s residential market at the time.
The estate agents implemented their illegal arrangement primarily through secret meetings where they discussed sensitive information.
The agents used various methods to maintain their arrangement, including monitoring and internal reporting.
The four unscrupulous agents also agreed a system of penalty payments for those who broke it. Concerns from several of the agents that their conduct might be a ‘cartel’ (where rivals illegally eliminate fair competition) yet went ahead with their dodgy plans.
This is obviously not a cartel as the public has plenty of choice in terms of cheap, poorly-performing agents to go to. This is not a fixed fee either, but a minimum fee.
FAIR
Competition law exists to ensure businesses compete fairly and customers are protected from getting ripped off. Price fixing cartels are among the most serious kinds of anti-competitive behaviour as they cheat customers by forcing up prices and reducing quality and choice.
By fixing minimum levels of commission rates, the estate agents denied local people selling their homes the chance of getting the best possible deal. The three agents were fined a total of £605,519. As the fourth agent brought the illegal activity to the CMA’s attention and fully cooperated with the investigation, it received immunity from fines and director disqualifications under the CMA’s Leniency Programme. Under the programme, another agent had their fine reduced by 50% and gained immunity from director disqualification.
All anti-competitive arrangements, whether written or verbal, formal or informal are equally illegal, and the CMA has sophisticated means of tracking down evidence, and there are no excuses for illegal anti-competitive activity.
When The Eye Of Media.Com contacted Michael Hardy Estate Agents, we were told Michael Hardy had been kicked out from the company he started. ”He no longer works here and everything is now progressive and above board”, a spokesperson said.