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Final price fixing defendants get $1.5m fine

Property Brokers Limited and its director have been ordered to pay penalties of $1.5 million, for their part in a Manawatu price fixing scandal, by the High Court.

Monday, April 10th 2017, 6:00PM

by Miriam Bell

The company and its director, Tim Mordaunt, are the final defendants to appear in court in the proceedings, which stemmed from price fixing charges against 13 real estate agencies around the country filed by the Commission in late 2015.

The charges, which followed a long investigation, were for three separate alleged price fixing and anti-competitive agreements among national real estate agencies, Hamilton real estate agencies and Manawatu real estate agencies.

In the Manawatu case, the Commission alleged that Property Brokers, Manawatu 1994 and Unique Realty breached the Commerce Act by agreeing that they would each pass on to vendors the full cost of advertising a property on Trade Me.

Proceedings were also filed against Mordaunt for his role in facilitating the agreement.

In his ruling released Monday, Justice Murray Gilbert said the penalty needed to reflect the nature and seriousness of this type of misconduct.

“Price-fixing agreements fundamentally undermine the proper functioning of competitive markets and have the potential to substantially erode the benefits the public is entitled to expect from them.

“Such agreements are antithetical to the purpose of the Commerce Act which is to promote competition in markets for the long-term benefit of consumers within New Zealand.

“For these reasons, participation in price-fixing agreements is regarded as serious misconduct and must be met with a penalty that is sufficient to deter other market participants from engaging in this type of conduct.”

Property Brokers and Mordaunt reached settlements with the Commission after admitting that their conduct breached the prohibition on price fixing in the Commerce Act.

They have been ordered to pay penalties of $1.45 million and $50,000 respectively.

Commission chairman Mark Berry said the agreement between the Manawatu agencies left vendors with only two options - pay extra to advertise on Trade Me themselves or don’t advertise on the site at all.

“It is vital that businesses compete with their rivals and make their own decisions on how to respond to issues that impact on a whole industry, including whether to pass on costs increases to consumers.

“The penalties awarded in this case send a clear message that such collusion is taken seriously as it can cause significant harm to consumers.”

Unique Realty and Manawatu 1994 were earlier fined $1.25 million each for their roles in the Manawatu agreement.

The Commission has also come to settlements with Hamilton-based Success Realty and Bayleys at the national level.

The court-imposed penalties now total $7.1 million.

Read more:

ComCom charges real estate agencies after Trade Me row 

« Stop tarring investors with speculator brushBuild more bloody houses - Little »

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    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
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