Bayley
Corporation and its Hamilton franchise have been fined a total of $3.1 million
for price fixing.
National real estate franchisor Bayley
Corporation and its Hamilton franchise holder Success Realty have fessed up to
price fixing in colluding to pass on Trade Me’s 2014 price increase for online
listings. Bayley was fined $2.2 million
with payment deferred until 31 December 2016.
Success was fined $900,000. These
fines include a 45% discount for early guilty pleas and for co-operation with a
Commerce Commission inquiry.
Prior to 2014, Trade Me allowed real
estate agents unlimited listings in return for payment of a negotiated
subscription fee. This fee was generally
absorbed by each agency as a business overhead.
Trade Me’s imposition of a fee per listing led to high level meetings
between real estate agencies where the Commerce Commission alleges they jointly
agreed to pass on these costs to vendor clients.
The High Court was told Bayley met with
representatives of Harcourts, Barfoot & Thompson, LJ Hooker and Ray White
in August 2013. The Commerce Commission
challenged the outcome of this meeting as price fixing; real estate agents were
agreeing not to compete on price. Of
those attending, only Bayley has admitted to price-fixing. Justice Courtney imposed a $2.2 million fine.
Success Realty has five per cent of the
Hamilton residential market. It admitted
to price-fixing. It was already charging
vendor clients a $30 fee for each standard Trade Me listing, but increased this
to the full Trade Me price when the subscription fee regime ended. Success said only 51 clients agreed to a
Trade Me listing when asked to pay the new individual listing fee prior to
Trade Me later returning to an updated subscription fee. Justice Courtney imposed a $900,000 fine.
The Commerce Commission is also challenging
alleged price-fixing by Waikato agencies: Lodge Real Estate, Lugton’s, Monarch
and Online Realty.
Commerce
Commission v. Bayley Corp & Success Realty – High Court (1.07.16)
16.101