CMA gives details of cartel investigation and sanctions

The Competition and Markets Authority (CMA) has published its decision on a cartel of Berkshire estate agents where they conspired, for seven years, to set minimum commission rates where they were the top agents.

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As Propertymark reported in December local homeowners in Wokingham, Winnersh, Crowthorne, Bracknell, and Warfield were unable to shop around local agents for a deal on commission rates as a result of the cartel behaviour.

The CMA has already announced penalties of £142,843, £268,765 and £193,911 for three of the parties involved. A fourth has been spared under the CMA’s leniency policy as they brought the cartel to light and have continued to comply with the law.

The 131-page report, published on 23 January 2020, reflects the depth of the CMA’s investigation. Their findings are supported by contemporaneous documents such as emails, reports, diary entries, and Outlook appointments, together with witness evidence from two of the individuals directly involved in the Minimum Fee Arrangement.

It details how the cartel made a Minimum Fee Arrangement and monitored and exchanged information on each other’s commission fees including contacting each other directly on suspected breaches. At least two parties developed internal reporting and monitoring mechanisms to check compliance by the other parties and agreed that penalty payments would be made if a Party breached the Minimum Fee Arrangement.

'Ignorance or a mistake of law does not prevent a finding of intentional infringement, even where such ignorance or mistake is based on independent legal advice'
CMA ruling

The CMA found that the agents were aware, and discussed, that their actions might amount to a cartel, but still went ahead with it, with some agencies instructing agents not to put any details in writing, suggesting that the action was taken deliberately or at least negligently.

The CMA stresses throughout the report that even if an agent played only a limited part in an agreement, they remain a party to that agreement and legally liable unless they 'publicly distance' themselves from the illegal activity.

The full CMA ruling can be read on the website

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Stop Cartels campaign

It is vital that agents are alert to the dangers of breaking competition law, and clear on what they can and cannot discuss with rivals. The CMA has a wealth of information on the Stop Cartels campaign page to help businesses understand competition law rules and how best to report suspected illegal business behaviour.