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Tommy’s Real Estate receives Commission warning

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.

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