Boycott
When individuals or business withhold their patronage to a business as a protest or to reduce competition
Price-fixing
(google definition)
The practice of setting prices for products or services, rather than letting competition in the open market establish those prices
Antitrust laws
Laws designed to preserve the free enterprise of the open marketplace
What does the Sherman Antitrust Act provides on the federal level
Specific penalties of a number of illegals business activities
How many states have antitrust laws
All 50 states
And what do these laws prohibit
They prohibit monopolies, contracts, combinations, and conspiracies among the competitors
What is the most common antitrust violation
Price-fixing, group boycott, allocation, and tie-in agreements
Price-fixing
Is a practice in which competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices
When does price-fixing occur
When competitions brokers must independently determine commission rates or fees for their firms only
What are brokers able to discuss with official realtors who work under the same building
They may discuss commissions, and fees only
Are they able to discuss this with anyone else
NO!!!
What can’t trade groups, multiple listing services, and other professional organizations do
Set fees, commission splits, and deny memberships
Hinting to perspective clients that there is a”___” of commission or a “___” fee implies that rates are, in fact, standardized
Going rate; normal
Brokers and realtors needs to tell clients that the ___ is the only thing that the brokerage charges
Rate stated
Boycott
Occurs when 2 or more business conspire against another business or agree to withhold their patronage to reduce competition
A group boycott
Is illegal under antitrust laws
Example of a group boycott
Has occurred when a traditional full-service brokers have conspired to destroy a competitor’s firm by not showing that firms listing
The competitor may be a so-called discount broker or one who offers unbundled services under the ___
Fee-for-service concept
Allocation of customers or markets
Involves an agreement between real estate brokers to divide their markets and refrain from competing for each other’s business
___ may be made on a geographic basis, with ___ agreeing to specific territories within which they will operate exclusively
Allocations; real estate brokers
Also known as typing agreements
Tie-in agreements
Tie-in agreements
Are agreements to sell one product only if the buyer purchases another product as well
The sale of the first (desired) product is
Tied to the purchase of a second (less desirable) product
Example of tie-in agreements
A broker will agree to list a seller’s home for sale only if the seller agrees to be represented by the broker in the purchase of a new home
Penalties
Violating antitrust laws are severe
Under the Federal Sherman Antitrust Act
The penalty for fixing prices or allocating markets is a maximum $1 million fine and 10 years in prison
For corporations
The penalty may be as high as $100 million
An individual who has suffered a loss because of an antitrust violation
Ma sue for treble damages — 3x the actual damages sustained
The injured party may recover the cost of the suit
Which includes reasonable attorney fees