Real estate price-fixing saga ends with big penalty

Price-fixing is in the spotlight, once again, after the Auckland High Court ordered two Hamilton real estate agencies to pay $4 million for engaging in it.

Thursday, September 10th 2020

Lodge Real Estate Limited and Monarch Real Estate have been ordered to pay $2.1 million and $1.9 million respectively for price-fixing in breach of the Commerce Act.

The Court’s penalty judgment comes after the Supreme Court conclusively ruled – back in April - that the two agencies had come to a price fixing arrangement around online listing fees.

It brings to an end a long-running legal saga which began when Trade Me changed its online property listing fees in 2013.

This change led to a group of national real estate agencies, Hamilton real estate agencies and Manawatu real estate agencies meeting to discuss their response.

The Commerce Commission alleged the result of the meeting was an agreement to pass on the costs of Trade Me’s pricing change for real estate listings to vendors.

It said this amounted to price-fixing and, in late 2015, it took 13 agencies and three individuals to court over it.

Most of the agencies admitted their liability and agreed to pay the Commission penalties amounting to millions of dollars.

But Lodge Real Estate and Monarch Real Estate denied their liability and decided to pursue the matter through the Courts.

There were ups and downs in their battle with the High Court finding in their favour, before that finding was overturned in the Commission’s favour by first the Court of Appeal and then the Supreme Court.

Lodge and Monarch have now been penalised for their roles in coordinating the Hamilton regional response to Trade Me’s pricing decision.

Including the penalties ordered today, the final total of penalties imposed on the 13 agencies and three individuals involved in the legal proceedings amounts to just under $23 million.

But the Commission also issued warnings to an additional eight agencies for their role in the conduct.

Commission chair Anna Rawlings says 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.

“Cartels can harm consumers and business by raising prices, restricting supply and changing the competitive dynamic between businesses.

“The nearly $23 million in total penalties handed down in this case is substantial and from April next year cartel conduct will also be a criminal offence subject to a maximum term of seven years’ imprisonment.

“We strongly urge businesses to familiarise themselves with the law and ensure they have processes in place to guard against collusion with their competitors.”

Read more:

ComCom charges real estate agencies after Trade Me row

Supreme Court dismisses price-fixing appeal 


No comments yet

Heartland Bank - Online 1.85
The Co-operative Bank - First Home Special 2.09
SBS Bank Special 2.19
TSB Special 2.25
The Co-operative Bank - Owner Occ 2.25
Kainga Ora - First Home Buyer Special 2.25
ICBC 2.25
AIA 2.25
Westpac Special 2.25
HSBC Special 2.25
ANZ Special 2.25
ICBC 2.35
HSBC Premier 2.35
Heartland Bank - Online 2.35
TSB Special 2.49
SBS Bank Special 2.49
Kiwibank Special 2.55
BNZ - Classic 2.55
The Co-operative Bank - Owner Occ 2.59
AIA 2.59
Westpac Special 2.59
ASB Bank 2.59
HSBC Premier 2.89
China Construction Bank Special 2.99
ICBC 2.99
SBS Bank Special 3.19
Kainga Ora 3.37
The Co-operative Bank - Owner Occ 3.39
TSB Special 3.39
AIA 3.39
Kiwibank Special 3.39
BNZ - Classic 3.39
ASB Bank 3.39
Heartland Bank - Online 1.95
Resimac 3.39
Kiwibank - Offset 3.40
Kiwibank Special 3.40
Kiwibank 3.40
Bluestone 3.49
Select Home Loans 3.49
ICBC 3.69
The Co-operative Bank - Standard 4.40
The Co-operative Bank - Owner Occ 4.40
Kainga Ora 4.43

More Stories

Concerns about new tax ‘dismissed out of hand’

Friday, May 14th 2021

Concerns about new tax ‘dismissed out of hand’

The Property Investors Federation’s pleas for the Government to stop plans removing investors’ ability to claim mortgage interest payments as a tax deduction or modify how the policy is introduced have fallen on deaf ears.

House prices haven’t dropped yet – new records set

Thursday, May 13th 2021

House prices haven’t dropped yet – new records set

Records for house prices have been set yet again despite the lowest number of houses available for sale during an April month since records began.

Methamphetamine use doesn’t mean eviction

Wednesday, May 12th 2021

Methamphetamine use doesn’t mean eviction

A landlord who wanted to evict a tenant because of possible methamphetamine use by two flatmates has been slapped down by the Tenancy Tribunal.

New homes under threat from overstretched construction sector

Wednesday, May 12th 2021

New homes under threat from overstretched construction sector

While the unemployment rate has fallen to 4.7% it could have an outsized risk for new home building.