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A group of real estate agents who were seeking to boycott realestate.com.au and Domain to reduce the “excessive prices” charged by the portals have been dealt a blow by the corporate regulator.
Property Media Group Pty Ltd (PMG) made an application to the Australian Competition and Consumer Commission (ACCC) on behalf of itself and 170 real estate agents – from individual agents to representatives of large franchise groups – to seek to collectively bargain and boycott suppliers of online and print real estate advertising, including realestate.com.au and domain.com.au.
PMG sought authorisation for the conduct because it sees realestate.com.au and domain.com.au as “having significant market power, charging excessive prices and essentially forcing real estate agents onto premium contracts”, the ACC said.
PMG was hoping to “collectively negotiate terms, conditions and fees with any suppliers of online or print residential real estate advertising in Australia”.
“It also seeks authorisation for agents to boycott realestate.com.au or domain.com.au in certain circumstances. A collective boycott involves two or more competitors agreeing not to acquire goods or services from a target supplier. In this case, PMG has indicated that a boycott may include agents not agreeing to acquire premium property listings, or participating agents in a region agreeing not to enter into contracts with a real estate platform.”
In a blow for the group, ACCC commissioner Roger Featherson announced today that the regulator is not satisfied with the proposal and has issued a draft determination to deny the request.
“While the ACCC considers that collective bargaining and boycott action can be in the public interest in certain circumstances, we are not satisfied that the conduct proposed by PMG would result in significant public benefits,” he said.
“The ACCC is particularly concerned by the potential size and scope of collective bargaining groups and boycott activities, combined with uncertainty about how PMG will ultimately conduct negotiations and implement any boycotts.”
The ACCC said there appeared to be sufficient competition in the listings portal space, negating the need for the boycott and action by agents.
“… the ACCC considers that while realestate.com.au and domain.com.au have some market power, there is evidence of competition between each other and from other small mid-tier players. The ACCC also received information which shows that real estate agents can and do enter into a diversity of contracts and listing types, including within the same region,” the ACCC said.
The ACCC is now seeking submissions from Property Media Group and interested parties in relation to its draft determination before making a final decision, expected in October.
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