A group of six real estate agents have been fined for illegal activities
A real estate cartel has been uncovered by UK authority that has been colluding to drive in more profits. The cartel included six real estate agents who were involved in a plan to push up local fees in southwest England. All of them are based on Burnham-on-Sea who agreed to manipulate the charges in a meeting. They had fixed their minimum commission rates at 1.5 per cent to avoid negotiations on property deals in the region. Action has been taken against them by the national competition authorities. The group of real estate agents has been fined a sum of £370,084 by the authorities.
The cartel was exposed by the emails detailing the plans. The U.K.’s Competition and Markets Authority (CMA) has said there is “low levels of competition law awareness” in the real estate sector since this is the second case in recent years when it had to take action. The senior director in cartels and criminal enforcement at the CMA, Stephen Blake, said that due to these recent incidences, the CMA has conducted compliance campaigns to raise awareness of competition laws. He said that the latest action against the real estate agents is the result of campaigns conducted earlier as it received complaints based on the previous effort.
The cartel was uncovered by a sixth estate agent in the cartel. As a result of the leniency policies towards informants, the agent who was instrumental in revealing the illegal plans of the cartel, was spared action. The agent was the first to confess participation in the illegal activities to the CMA and cooperated with the authorities in the investigation conducted by the authority. The CMA follows a policy of exempting those who supply information regarding cartel activities. Those who cooperate with it in the investigating the activities of cartels are granted reduced penalties or total immunity.
The competition analyst said that almost half of the cases are revealed this way. The email communications by the cartel was a strong factor against the cartel which included offensive statements. The CMA said that the email communications between the cartel agents includes statements such as “with a bit of talking and cooperation between us, we all win!”. These proved to be one of the important factors against the group of real estate agents. The emails contained statements like “the aim of the meeting … will be to drive the fee level up to 1.5 per cent” and “…it’s really important we all give it the priority it deserves (making as much profit as possible!).”
But Blake denied that the authority relies solely on emails as the basis of its operations. He said that there a number of other ways through which the authority gathers information that includes the use of its own intelligence network.
Generally, CMA gathers information through its dedicated cartel hotline. Sources provide information via this dedicated hotline regarding cartel activities and then actions is taken against them. The information is not necessarily provided by those involved in the cartels. It involves members of the public as well who are not involved in the activities of a cartel but concerned about the activities that know. Blake added that the authority has an informant rewards programme to reward those assisting the authority. He said that the authority also conduct awareness programmes regarding its hotline and leniency policy.Risk Warning:
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