The CMA has revealed details of its investigation into a cartel of estate agents it fined £370,084.
The regulator fined the group of Somerset-based agents in May this year after it emerged they had been involved in a price-fixed racket.
It has now revealed details of the cartel, which was secretly agreeing to set minimum commission rates to boost profits. It’s in a bid to deter other firms from making the same mistake.
The group, based in the Burnham-on-Sea area, agreed to fix their minimum commission rates at 1.5 per cent.
The CMA discovered email evidence saying the aim of the meeting ‘will be to drive up the fee level’. Further messages say: ‘…it’s really important we all give it the priority it deserves (making as much profit as possible).’
CMA senior director of cartel enforcement Stephen Blake says: “Cartels are a form of cheating. They are typically carried out in secret to make you think you are getting a fair deal, even though the businesses involved are conspiring to keep prices high.”
The CMA issued fines on five of six agents involved in the cartel. These are: Abbott and Frost Estate Agents, Garry Berryman Estate Agents and its parent company Warne Investments, Greenslade Taylor Hunt, Saxon PS, and West Coast Property Services.
All but Saxons PS saw their fines discounted due to their admissions and co-operation.
The CMA says the final company involved – Annagram Estates trading as CJ Hole – was not fined as it was the first to confess its involvement.
The cartel was first formed in 2014. It disbanded the following year after the CMA took action against a similar group.
The CMA started investigating in December 2015 and made its decision in May this year.
National Trading States estate agency team head James Munro says: “We welcome this reminder to the property sector of the importance of competition law. Being part of a cartel can have serious consequences for both businesses and individuals.
“We use cases like this as a trigger to assess the fitness of an individual or business to engage in estate agency work. This can lead to a formal warning or lifetime ban.”
It’s the second time the CMA has taken enforcement action against estate agents in recent years.
The body says it raises concerns the sector does not properly understanding the seriousness of breaking competition law.
Blake adds: “We are committed to tackling cartels regardless of the size of the businesses involved. We have taken action against estate agents before and remain committed to tackling competition law issues in the sector.”
The CMA has launched a guide to help businesses understand more about competition law.