Bayleys will pay a $2.2 million penalty after the real estate firm 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 that faced or is facing legal action over what the Commerce 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 admitted its conduct breached the prohibition on price fixing in the Commerce Act.
The real estate firm appeared for a penalty hearing in the High Court at Auckland last month before Justice Patricia Courtney. Both Bayleys and the commission told the judge they believed a penalty of $2.2 million was appropriate.
During that hearing Bayleys' 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.
In her ruling released today ordering the $2.2m penalty, Justice Patricia Courtney acknowledged the seriousness of the conduct and its potential to affect a large number of transactions for residential properties. Justice Courtney also said that competition in the sector had permanently changed due to the agreement.
Bayleys managing director Mike Bayley said this evening that the company was reviewing the decision and would comment in due course once that had been completed.
Hamilton-based Success Realty was also ordered to pay a penalty of $900,000 today after it also settled with the commission.
Earlier this year, Manawatu real estate agency Unique Realty was ordered by the High Court to pay $1.25 million for fixing prices.