On 3 June 2015, the Competition and Markets Authority (CMA) sent out 2 open letters addressed to estate agents and newspapers warning them of the risk and consequences of breaking competition law. The CMA hopes that these open letters will promote the lessons to be learned and encourage best practice in the future.
The letters come as a result of an association of 3 estate agents and a newspaper publisher being found guilty of anti-competitive behaviour in March 2015. The papers and agents in question had agreed to restrict the display of all fees and discounts and not to make any reference to their fees or discounts in a local newspaper.
The estate agents and newspaper were fined over £735,000 after admitting to the CMA they had broken the law.
Breaking competition law can lead to inflated prices, reduced innovation and limited consumer choice by the estate agents deliberately entering into agreements to reduce the competition between each other. This means it makes it harder for consumers to compare prices, seek out the best offers available and get good value for their money.
The open letters written by the CMA on the 3rd June remind both industries that agreeing with other competitors to restrict the advertising of fees is highly likely to be illegal and that the consequences for breaking the law are severe. Both letters include that businesses could be fined up to 10% of their annual worldwide turnover and that company directors could be disqualified for a maximum of 15 years for any kind of similar behaviour. Furthermore, the letters also warn that any individual found to be guilty of the criminal cartel offence for activities such as price-fixing, could spend a maximum of 5 years in prison.
The CMA is working with other industry bodies such as the National Estate Agents Association to ensure that businesses understand how to comply with competition law. This shows a proactive approach by the CMA and can be seen as a stark warning to this industry and others.