The best way to avoid antitrust liability is to ensure that all business decisions are made independently within the brokerage. The potential for antitrust liability arises any time two or more competitors discuss their business practices. REALTORS® must always be alert to discussions that focus on commission rates, pricing structures, listing policies, or marketing practices of other brokerages. If a discussion becomes troubling, immediately suggest a change of topic, or remove oneself from the conversation. Within the real estate arena, we most often hear of antitrust issues arising from price fixing and group boycotts.
Price fixing may be as obvious as two or more competitors blatantly agreeing to charge consumers the same commission on real estate transactions or agreeing to the same cooperating commission splits. Price fixing can also arise in more subtle ways, such as suggesting to consumers that there is a “standard fee” or that “everybody charges the same amount.”
A boycott results when two or more competitors refuse to do business with another competitor or are only willing to cooperate with that competitor on less favorable terms. These actions may cause the competitor to change their business practices (which could also lead to price fixing) or even force them out of business.
REALTORS® must also be cautious in placing advertisements that may result in antitrust violations. Advertisements that directly compare or criticize a competing business model may not only implicate antitrust laws but may also lead to a Code of Ethics violation. Article 15 prohibits REALTORS® from making false or misleading statements about other real estate professionals or their business practices.
Liability for antitrust violations can be significant with the potential for both monetary damages as well as criminal sanctions.
Courtesy of Massachusetts Association of REALTORS® Legal Staff.