A group of estate agents, three of its members and newspaper publisher Trinity Mirror have been fined more than £775,000 between them after a ‘cartel’ ruling.
The Competition and Markets Authority said it is looking at similar alleged conduct involving agents across the UK.
The cartel, in and around the small town of Fleet in Hampshire, will cost one of the agents, Hamptons International and its parent company Countrywide, up to £690,000.
Three Counties Estate Agents, plus three of its member agents – Castles, Hamptons International and Waterfords – are all being penalised.
Trinity Mirror Southern which publishes the Surrey & Hants Star Courier is also being fined.
All had breached competition law, said the Competition and Markets Authority.
Castles, Hamptons and Waterfords had entered into an agreement which prevented members of the Three Counties Association from advertising their fees or discounts in the Courier.
Waterfords and Hamptons had extended the scope of this arrangement, with the co-operation of the newspaper, to prevent any agents at all, including non-members of the Association, from advertising their fees or discounts.
The CMA launched its investigation at the end of 2013, saying that these arrangements reduced competitive pressure on estate and letting agents’ fees in and around Fleet.
In addition, it said, the restrictions may have made it harder for potential competitors to enter the market because they were unable to advertise their fees to attract new customers.
The CMA also alleged that these practices potentially limited consumers’ choices and obstructed their ability to compare prices and value for money.
Following the companies’ admission to having made such arrangements, the CMA said it intends to issue an infringement decision around the end of April.
Ann Pope, CMA senior director of anti-trust enforcement at the CMA, said: “These companies have admitted to making arrangements which aimed to reduce competition on fees and could have made it harder for new and innovative businesses to compete. The parties have also agreed to pay significant fines.
“This case again demonstrates the CMA will take action in local markets as well as big national ones.
“It also shows that, where infringements take place within the context of trade associations, both the members of the association and the association itself can be found to have breached the law. This can result in severe financial penalties for the members, even where the association itself has limited funds.
“The CMA has received complaints of potentially similar conduct concerning alliances of estate and lettings agents and local newspapers in other geographic locations across the UK.
“This may result in further investigations into similar restrictions, regardless of the size of company involved, particularly if they take no steps to remove such restrictions in light of the present investigation.”
Castles will pay a fine of £19,275 to which a discount of 10% will be applied if it observes the terms of settlement, giving a penalty of £17,348.
Hamptons is being fined £690,317, which could reduce to £621,285. Countrywide itself will pay £414,190 of the fine, reducing to £372,771.
Waterfords will pay £51,693, reducing to £46,524.
Three Counties will pay £100, reducing to £90.
Trinity Mirror Southern will pay £101,397, reducing to £91,257.
A spokesperson for Countrywide said: “Hamptons International confirms that it has agreed a settlement with the Competition and Markets Authority (CMA) in relation to arrangements involving its branch in Fleet and two other local estate agents, Waterfords and Castles.
“The arrangements related to the Three Counties Estate Agents Association which was formed to negotiate preferential advertising rates in a local newspaper. This association was set up in 2005.
“Hamptons International was not involved in the association when it was set up and its later involvement was only through the local branch manager.
“Hamptons management was not aware that the arrangements included a restriction on advertising fees. We have cooperated fully with the CMA throughout its investigation and the practice of restricting the advertising of fees has been stopped.”
Waterfords declined to comment.