The Competition and Markets Authority (CMA) have concluded their investigations into a handful of estate agents who were suspected of engaging in anti-competitive and cartel behaviour.
Six estate agents in Somerset are being held liable for breaching Chapter I of the Competition Act 1998 and were handed fines totalling £370,000. One of the agents escaped a fine as they were the first to confess their participation in the anti-competitive behaviour, and subsequently co-operated with the CMA in its investigation.
The estate agents responsible for the breaches are:
- Abbott and Frost Estate Agents Limited
- Gary Berryman Estate Agents Limited and its parent company Warn Investments Limited
- Greenslade Taylor Hunt
- West Coast Property Services (UK) Limited
- Saxons PS limited
- Annagram Estates Limited (trading as CJ Hole)
Annagram Estates was not issued a fine so long as they stick to the generous leniency policy offered by the CMA, which includes full and continual co-operation with the CMA, and means they must keep in line with important competition legislation.
Admission from the agents involved
The six businesses admitted they were engaged in illegal price fixing. From February 2014, the estate agents participated in a price-fixing cartel for a year, setting a minimum commission rate for helping home owners sell their residential properties. The commission was fixed at 1.5%, and with the multi-company collusion, local homeowners were potentially unable to find a better deal with any estate agent involved. Prospective sellers may therefore have likely assumed that 1.5% was the norm, and they may feel they had no alternative but to agree it.
Condemnation from the CMA
Senior director of cartel enforcement at the CMA, Stephen Blake, condemned the estate agents’ greedy and controlling behaviour:
“Moving home is expensive and this shouldn’t be made worse by estate agents conspiring to deny their customers the best possible deal, by agreeing not to compete on fee.
Price-fixing cheats customers, and we are committed to tackling it regardless of the size of the business involved. We have taken action against estate agents before, and will do so again if firms break the law.”
Mr Blake’s statement may refer to the successful investigation concluded in 2015 where several members of the Three Counties Estate Agent Association were found liable for breaching competition laws. The members were engaging in anti-competitive behaviour with a local newspaper to advertise fees in a way that “reduced competitive pressure” and “potentially limited consumers’ choice and ability to compare prices and assess value for money.”
For this, the members were issued a fine totalling £735,000.
The U.K.’s Competition Act enforces healthy and competitive markets for industries to fuel competition between businesses which can help lower prices for consumers; all the while encouraging innovation in the production of new and better products and services. Anti-competitive behaviour usually means the top players control the market and are unjustly enriched by forcing consumers to pay fixed or minimum prices with little or no alternatives available. This can cost the consumer more and can restrict new players entering the market and bringing with them new and innovative ideas and goods.
Image Credit:
http://s0.geograph.org.uk/photos/71/47/714759_1130bcc7.jpg