Thirteen real estate companies are being prosecuted by the Commerce Commission over tactics that may have discouraged their clients from advertising properties on Trade Me.

The commission said the estate agents colluded to pass on Trade Me listing fees to home-sellers in full, without available discounts, saying that amounted to "price-fixing and anti-competitive behaviour".

The effect may have been to divert property listings to rival website realestate.co.nz, which is half-owned by estate agents.

Barfoot and Thompson, Harcourts, LJ Hooker, Ray White and Bayley Corporation are among the firms being prosecuted. The competition watchdog said it had also filed proceedings against Trade Me rival Property Page and three individuals. Another eight real estate firms had received warnings.

Property Page is owned by estate agents and half owns realestate.co.nz, which is Trade Me's main rival in the market for online property listings.


The alleged boycott prompted Trade Me founder and director Sam Morgan to label the estate agents as "turkeys". However, the competition watchdog said in April that the scope of its inquiry had changed to focus on the way Trade Me fees had been passed on to home sellers.

The commission claimed the defendants breached the Commerce Act by agreeing a planned industry response to Trade Me's changed pricing model, with Property Page "aiding and abetting" that collusion.

It alleged the parties agreed clients selling homes would have to pay Trade Me's listing fees in full to have their properties advertised on Trade Me, and that the agencies would not commit to taking advantage of fee discounts offered by Trade Me.

The competition watchdog said Bayley and Unique Realty in Manawatu had agreed in principle to admit guilt and to pay a court-imposed fine.

Companies can be fined up to $10 million for breaches of the Commerce Act, or more if their gains from any illegal activities were greater than that.

The largest ever fine in a cartel case was a $7.5m fine against Air New Zealand.

Barfoot and Thompson
Harcourts Group
LJ Hooker
Ray White
Bayley Corporation settlement pending
Property Page
Monarch Real Estate (trading under the Harcourts banner),
Lodge Real Estate (Hamilton) Limited,
Lugton's
Online Realty (trading under the Ray White banner)
Success Realty (trading under the Bayleys banner)
Property Brokers in Manawatu
Manawatu 1994 Limited (trading under the LJ Hooker banner)
Unique Realty settlement pending

Coast to Coast (trading under the Bayleys banner)
Alrose (trading as RE/MAX Palmerston North)
Rural and Lifestyle Sales.com
Real Estate House Manawatu (trading under the Ray White banner)
Harcourts Team Manawatu Realty (trading under the Harcourts banner)
Watson Real Estate
PGG Wrightson Real Estate
Monty's Real Estate

COMMERCE COMMISSION'S LONGEST-RUNNING INVESTIGATIONS

Cardboard case wrapped up in 697 working days

The watchdog's investigation into the so-called cardboard cartel is believed to be its longest. The case, which was finally wrapped up in December, saw Australian-owned Visy Board ordered to pay a penalty of $3.6 million by the High Court in Auckland for price-fixing.

Air Freight cartel brought down after 665 working days

Six companies were penalised a total of almost $12m for their roles in what the commission described as "hard core" cartel behaviour, fixing prices for surcharges on air freight forwarding services from Britain to countries including New Zealand. The companies in the self-named "Gardening Club" met in secret and used "code words" to coordinate their activities.

Livestock companies branded cheats by the commission after 614 days

The commission filed proceeding against PGG Wrightson, Elders New Zealand and five current or former employees for alleged price-fixing in relation to the electronic tagging of cattle, which was required by a new law passed in 2012. The case is now before the courts.

No penalties, but hopes 607-day investigation may result in healthier competition among pharmacies

The commission claimed district health boards breached the Commerce Act by demanding pharmacies not to waive or discount a $5 payment made by patients for prescriptions. But it let everyone off with a warning after the "no-discounting" clauses were removed.