Tommy’s Real Estate receives Commission warning
The Commerce Commission is reminding the real estate industry of its obligations under the Commerce Act after sending a
formal warning to Tommy’s Real Estate Limited for discussing commission rates with a competitor.
Commerce Commission Chair Paula Rebstock said that the Commerce Act prohibits contracts, arrangements or understandings
between competitors which have the purpose, effect or likely effect of fixing, controlling or maintaining the price for
goods or services.
“The real estate industry needs to be aware, as do all industries, that any attempts made to interfere with the
competitive determination of price will be viewed seriously by the Commission.
“Price fixing harms consumers in the most fundamental way – by lessening price competition in a market,” Ms Rebstock
said.
The Commission investigated Tommy’s Real Estate after receiving a complaint from a competitor regarding a telephone call
from Tommy’s. The conversation focused on a letterbox flyer distributed by the competitor, promoting 2 percent
commission rates.
“The Commission’s investigation centred on the issue of whether an attempt was made by Tommy’s to persuade a competing
real estate agent to raise its commission rates,” said Ms Rebstock.
“The competitor claimed that on the basis of the conversation, he was left with the impression that he should not
discount commission rates.”
“The Commission has issued a warning to Tommy’s that in its view, Tommy’s was engaging in conduct that placed it at risk
of contravening the price fixing provisions of the Commerce Act.
“This warning sends a wider message to the real estate industry to be aware of its obligations to comply with the
Commerce Act, and that the Commission takes seriously any breaches of the anti-competitive provisions of the Act,” said
Ms Rebstock.