Four estate agents which colluded to set a minimum commission of 1.5 per cent denied local home-owners selling their property the chance of securing a better deal according to the Competition and Markets Authority (CMA). The four have been fined over £370,000 after admitting illegal price-fixing.
A fifth agency remains under investigation and a sixth has escaped a fine for being a whistle-blower and alerting the CMA to the case. All the agencies were based in the Burnham-on-Sea area of Somerset.
Stephen Blake, Senior Director, Cartel Enforcement of the CMA said: “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 fees.
“Price-fixing cheats customers, and we are committed to tackling it regardless of the size of the businesses involved. We have taken action against estate agents before and will do so again if firms break the law.”
The estate agents received a 20 per cent reduction in their fines for cooperating with the investigation, while two received additional ‘leniency’ reductions of up to 35 per cent. The CMA’s leniency policy is designed to offer reduced fines or immunity for prosecution to businesses that report cartel activity and assist the CMA with its investigation. A business can be fined up to 10 per cent of its annual turnover for anti-competitive practices under the Competition Act 1998.
“This is the second time in recent years that the CMA has targeted estate agents,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “It follows action against members of an estate agency association in 2015 which resulted in fines of £735,000. The CMA has been actively encouraging whistle-blowers with the promise of reduced fines and has been running a campaign designed to improve understanding of the law within the agency market.
“Agents should be aware that fines are not covered by their professional indemnity policies, so they could face a big pay-out if they get caught in illegal price-fixing.”
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