FOUR Wokingham-based estate agents have been found guilty of operating a price-fixing cartel for almost seven years.
As first reported by John Wakefield in wokinghampaper.co.uk, on Tuesday, December 17, the Competition and Markets Authority (CMA) announced that three of the firms will be fined more than £600,000 for illegally fixing the minimum commission rates they charged their customers.
Earlier this year, the CMA revealed it was investing the four companies – Michael Hardy, Prospect, Richard Worth, and Romans. The quartet broke competition law by taking part in the cartel, which began in September 2008.
The CMA found that the four companies conspired to set minimum commission rates for the sale of residential properties in Wokingham, Winnersh, Crowthorne, Bracknell and Warfield.
This involved the firms exchanging confidential information on pricing and holding meetings to make sure all members enforced and maintained the agreed minimum rates.
The result was that local home-owners were denied the chance of securing the best possible deal when selling their property because they were unable to meaningfully shop around all their local agents for better commission rates.
Michael Hardy, Prospect and Richard Worth have all been fined, but Romans will not be – the CMA said that this is because it brought the illegal activity to the CMA’s attention and fully cooperated with the investigation, under the CMA’s Leniency Programme.
Michael Hardy is being fined £142,843. This includes a reduction of 10% for settlement.
Prospect is being fined £268,765. This includes a reduction of 50% under the CMA’s Leniency Programme and 10% for settlement.
Richard Worth is being fined £193,911.
Michael Grenfell, CMA executive director of enforcement, said in a statement: “It is disappointing we’ve found yet another case of estate agents breaking competition law.
“We trust that the fines issued today will reinforce our message that we expect the sector to clean up its act and make sure customers are not being ripped off in this way.
“The industry needs to take note: this kind of behaviour will not be tolerated. If you break the law, you risk similar consequences.”
The total fines imposed take into account the behaviour of the companies involved. Michael Hardy’s and Prospect’s fines have been discounted to reflect the fact they admitted to illegal behaviour and agreed to cooperate with the CMA, thereby shortening the length of its investigation.
Tackling cartels is a fundamental part of the CMA’s work, and this is the third case it has taken against estate agents in recent years. Others include fining three members of the Three Counties Estate Agent Association £735,000 for breaking competition law in relation to letting and estate agent fees, and fining four estate agents in Somerset over £370,000 for colluding to set minimum commission rates.
The CMA runs a Stop Cartels campaign, which aims to educate businesses about which practices are illegal and urges people to come forward if they suspect a business has taken part in cartel behaviour, such as rigging contracts or price-fixing. It has also issued a range of guidance to help businesses understand more about how to comply with competition law.
The estate agents are being contacted for a comment and more on this story will appear in Thursday’s Wokingham Paper.
The Richard Worth under investigation is a different company to the one currently trading.
In June, when we covered the initial story, we carried the following statement from the Adelfas Property Group, which owns the Richard Worth name:
“Richard Worth Estate and Land Agents is a trading style of Adelfas Property Group Ltd and as pointed out by the CMA in its statement is not one of the companies under investigation.
“The internal checks and procedures of Adelfas Property Group will ensure that it will never be placed in a position that could be construed as anti-competitive.
“It would however be remiss of us not to recognise that Richard Worth Ltd (in administration), from whom we bought the name and assets, is subject to the CMA’s investigation but this is not a matter we are able to comment on.”