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Bayleys to pay $2.2m over price-fixing

Real estate agencies in court over Trade Me agreements.

Friday, July 1st 2016, 3:00PM

by The Landlord

Bayleys must pay $2.2 million after being accused of price-fixing in its protest over Trade Me fee increases.

Bayleys and Hamilton-based Success Realty, which operates under the Bayleys brand, appeared in the Auckland High Court.

Bayleys will pay $2.2 million, and Success will pay $900,000 in penalties.

They are are among 13 national and regional real estate agencies the Commerce Commission filed court proceedings against in December 2015.

The agents involved allegedly agreed that property sellers would have to pay Trade Me listings, not the agencies. A number pulled their listings from the site entirely.

The proceedings relate to three separate alleged price fixing and anti-competitive agreements among national real estate agencies, Hamilton real estate agencies and Manawatu real estate agencies in response to Trade Me changing its fees for listing properties for sale on its website.

Bayleys and Success are the first agencies to appear in court in relation to the national and Hamilton cases respectively.

Bayleys reached a settlement with the Commission before court proceedings were filed, while Success reached a settlement shortly after.  Each has admitted its conduct breached the prohibition on price fixing in the Commerce Act.

Justice Patricia Courtney acknowledged the seriousness of the conduct and its potential to affect a large number of transactions for residential properties.

Courtney also noted that competition in the sector had permanently changed due to the head office agreement, stating that the "possibility of competition was removed altogether for the period of the agreement and that situation meant that a new status quo existed when the revised model was introduced.  This meant that the scope for competition after the agreement came to an end was open to influence."

In the case of Success, Courtney said she did "not accept that this conduct falls at the lower end of the spectrum.  The listing of properties on Trade Me was a widespread and popular means of advertising for vendors and the agreement had the effect of depriving vendors of access to that service or, at the least, of the ability to negotiate for that service."

The Commission has now achieved penalties from an agency in each of the three separate national, Hamilton and Manawatu proceedings. The cases against the remaining 10 agencies, Property Page Limited and three individuals remain before the Court. No further comment will be given at this time.

 

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HSBC Premier LVR > 80% - - - -
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HSBC Special - - - -
ICBC 5.25 4.29 5.09 5.35
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
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SBS Bank Special - 4.19 4.85 4.99
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TSB Special 4.79 4.34 ▼4.99 5.35
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Westpac 5.54 5.09 5.79 6.09
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Median 5.45 4.55 5.25 5.52

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