Antitrust Laws & Definitions
An antitrust violation in real estate occurs when companies or individuals engage in practices that unfairly limit competition, control prices, or manipulate markets to the detriment of consumers. These violations are prohibited by antitrust laws, which aim to promote fair competition and protect consumers from monopolistic practices. Common antitrust violations in the real estate industry include:
1. **Price Fixing**: When competitors agree to set prices at a certain level, rather than letting competition in the market determine prices. For example, real estate agents or agencies agreeing to set a standard commission rate.
2. **Market Allocation**: When competitors agree to divide markets among themselves, such as by geography or type of client, to avoid competition with each other. For instance, real estate firms agreeing not to compete in each other have designated neighborhoods.
3. **Bid Rigging**: When competitors collude to control the outcome of bidding processes, such as at property auctions, to ensure a pre-determined winner.
4. **Group Boycotts**: When competitors agree to boycott a particular business or service provider, such as real estate brokers agreeing not to show properties listed by a certain agency or use a particular MLS (Multiple Listing Service).
5. **Tying Arrangements**: When a service provider conditions the sale of one service on the purchase of another, such as a real estate agent requiring clients to use a particular mortgage broker in order to work with them.