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New Zealand’s Commerce Commission has alleged that four Harcourts franchisees engaged in cartel conduct, with the franchiser, Harcourts Group, party to the agreements.
The alleged conduct involves Four Seasons Realty 2017 Limited, Gold Real Estate Group Limited, Grenadier Real Estate Limited, and Holmwood Real Estate Limited.
Together, the four franchisees controlled a “significant share” of the Christchurch real estate market.
Commerce Commission chair Dr John Small said the franchisees entered into agreements that affected the prices they charged customers, including commission rates, despite competing with each other.
“The commission alleges this conduct was damaging because, between them, the franchisees had a significant share of the Christchurch real estate market,” Small said.
“For most Kiwis, buying and selling a house is a major transaction. People should be able to trust the process is free of collusion.”
However, where franchisees do compete, the law preventing cartel conduct applies to them just as it does to any other business, Commerce Commission New Zealand stressed.
“In this specific case, it just so happens that the cartel conduct we are alleging took place in the context of a franchise relationship,” Small said.
“Franchisees need to be aware of when and where they compete with one another and ensure that they do not engage in cartel conduct, which carries significant risks such as criminal sanctions and potential penalties under the Commerce Act.”
Harcourts New Zealand responded to the allegations, saying: “Harcourts NZ confirms that we have received proceedings from the Commerce Commission. We take any allegations seriously and have co-operated with the Commerce Commission’s process.”
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