Ray
White franchisee Online Realty in Hamilton was fined $1.05 million for price
fixing after colluding with other real estate agents to pass on increased Trade
Me listing fees. Pleading poverty,
Online Realty has three years to pay by instalments. Ironically, franchise owner Ray White Ltd had
negotiated a suspension of Trade Me’s new fee schedule for all its agencies at
a time when Online Realty needlessly implemented the price fixing agreement.
The Commerce Act
prohibits cartel behaviour fixing prices.
The Commission has taken action against multiple real estate firms in
the Manawatu and Waikato for their response to a 2013 Trade Me proposal to
revise listing fees. Trade Me signalled
an end to its subscription model, with unlimited listing for an annual fee
replaced by a fee of $180 per listing.
The High Court was told Online Realty management agreed with other
Hamilton firms they too would pass on the new Trade Me listing fee to its
clients. This collusion amounted to
collective price fixing. Ray White head
office had agreed with Trade Me that implementation of the new fee schedule
would be delayed for all Ray White franchisees.
Online Realty could have continued operating under its existing subscription
model at the time it joined the Hamilton price fixing agreement by unilaterally
withdrawing all its current Trade Me listings.
Online Realty holds about nine per cent of the Hamilton residential real
estate market.
Commerce
Commission v. Online Realty Ltd – High Court (8.08.17)
17.097