The Commerce Commission and Bayleys have agreed the real estate firm should pay a $2.2 million penalty after it admitted being part of an alleged price-fixing deal with four of its major competitors.
Bayleys is one of a group of real estate agencies facing legal action over what the commission alleges is anti-competitive behaviour.
The competition regulator has also launched proceedings against Barfoot and Thompson, Harcourts , LJ Hooker, and Ray White. The alleged price-fixing occurred in response to Trade Me's 2014 change from a monthly subscription to a per-listing fee for properties advertised on its website.
The commission alleges the real estate agencies breached the Commerce Act by agreeing a planned industry response to Trade Me. It also alleges the parties agreed vendors would have to pay the listing fee to have their property advertised on Trade Me, and the agencies would not commit to any preferential or discounted listing fees with Trade Me.
Unlike its competitors, Bayleys reached a settlement, co-operated with the commission and appeared for a penalty hearing in the High Court at Auckland yesterday before Justice Patricia Courtney.
Commission lawyer John Dixon told the court Bayleys had admitted it entered into an anti-competitive price-fixing agreement and both sides had agreed on a recommended penalty of $2.2 million. The commission sought a declaration from the judge that Bayleys had breached the Commerce Act.
"The conduct has affected ordinary New Zealanders, that is to say those who are buying and selling a house," Dixon said. The alleged agreement was entered into by high-ranking staff, including chief executives, principals and director.
However, the fact the agencies had got legal advice on the agreement demonstrated it was not an intentional breach.
Bayley's lawyer, Tim Smith, said his client's conduct arose out of a legitimate concern of a significant price increase imposed by Trade Me for listings. The agreement was not entered into by stealth and was made after legal advice had been sought.
Justice Courtney reserved her decision on the penalty.
Last month Manawatu real estate agency Unique Realty was ordered by the High Court to pay $1.25 million for fixing prices.