For more than a century, federal antitrust laws have existed as a way to promote competition and prevent monopolies in business. Because real estate brokers and salespeople frequently cooperate with one another in the sale of properties, they have numerous opportunities to engage in conduct that might be construed as violations of antitrust laws. Do you know the ins and outs of antitrust?
Two competitors in my market asked me to cooperate with them in setting a “standard” commission for the area. I refused, but subsequently started charging the same rate that my competitors suggested. Because I didn't overtly agree to participate in price fixing, I am not part of a conspiracy.
Even though my salespeople are independent contractors, I may establish the commission rate for my company and require salespeople to charge that rate.
Brokers who agree not to cooperate with another company, such as by not showing that company's listings, do not violate antitrust laws if they enter into that agreement because they consider the company's aggressive "high-tech" marketing techniques to be unethical.
The best way to persuade sellers that they should enter into an exclusive-right-to-sell agreement with you is to tell them that MLS members have an "informal understanding" to show buyers exclusive-right-to-sell listings first.
My company benefits from MLS participation, but we don't want to pay a cooperative commission split to real estate companies that offer only nominal compensation on their listings, which we think they include simply so that their listings are shown on REALTOR.com and other public real estate Web sites. But if we decide to offer them the same amount of compensation that they offer us, we'll be breaking the law.
Antitrust price-fixing rules do not allow a real estate company to engage in a public advertising campaign that highlights the commission rate it charges to consumers.
Classified and display advertising rates in a local newspaper have increased substantially, which hurts all the real estate companies in town. Yet, no company is willing to stop advertising for fear of losing clients and customers to their competitors who continue to advertise at the high rates. To pressure the newspaper to reduce rates, which would benefit the companies and consumers, the real estate companies may agree that they will stop advertising unless and until the paper complies.
If one of my salespeople participates in a price-fixing discussion, my company can be held liable — even if I have no personal knowledge of the salesperson's conduct.