Apparently they both run cartels, which are of interest to the authorities.
Of course our friend Henry probably wouldn’t be quite so interested in the type of cartel apparently being run by letting agents in Somerset – where according to the Competition & Markets Authority (CMA) a group of six estate agencies contrived to fix their respective commission rates.A far cry from Scarface and his gang of associates! Sorry Henry, but I think it’s for the best in the long-run.
But I’ve never been to Miami!
The case actually relates to an investigation undertaken by the CMA back in 2015, whereby the agents in question organised to drive up fee commissions in their local area.
However, this is the first time the details have been published, and seek to act as a warning to other businesses considering similar ‘co-operation’.
Reinforcing the message, Stephen Blake, Senior Director of Cartel Enforcement said:
“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.”
“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.”
Surely I’m free to set my fees however I choose?
Yes and no. Fee levels in a market do tend to gravitate towards a natural point – the alternative is a race to the bottom which tends to favour those with the lowest overheads and often a laissez faire approach to the rules. However, in this case there was evidence of deliberate collusion between the parties, deemed to breach competition laws.
Following the investigation the CMA fined five of the six agents £370,084 – choosing not to fine the sixth in return for its early ‘co-operation’ with the authorities.