Words and actions, even seemingly innocent ones, can be interpreted in a way that wasn’t intended. But regardless of intention, word interpretation can mean everything in an antitrust investigation.

One example: Two competing brokers are having lunch and the conversation turns to improving the bottom line. One broker comments, “We’ve considered reducing the compensation we offer to cooperating brokers, but we worry that other companies won’t show our properties. We’d be less concerned if other companies initiated the same policy.”

If both brokers ultimately initiate a compensation-reduction policy, this seemingly innocent statement could be used as the basis for charges of price fixing. Although managing brokers within the same company can talk freely about ways to enhance revenue, the same conversation between competing brokers risks a violation of U.S. antitrust laws.

Antitrust laws were created to promote free and open trade. They do that by preventing actions that could restrain trade, such as price fixing, group boycotts and monopolies. Under federal and state law, companies must establish their fee structures and business relationships independent of competitors.

Boycotting outside businesses

In real estate, the antitrust laws impact more than just broker-to-broker relationships. To maintain a free market, companies are also prohibited from conspiring to boycott or injure service providers.

Example of an illegal agreement among competitors to restrain trade in relation to a service provider: “To save marketing costs for our clients, our company and two others have decided to withdraw advertising from the local newspaper until it lowers its rates.”

This agreement among companies to terminate or limit their advertising in a particular publication is almost certainly an unlawful group boycott. However, if several companies decide on their own not to advertise, there’s no violation.

The essence of a boycott or restraint of trade is collective action that’s the product of a tacit or explicit agreement.

Realtor associations and antitrust

Trade groups, such as Realtor^® associations and MLSs, are subject to particular antitrust scrutiny because of their potential to influence a marketplace of multiple companies. Associations are, almost by definition, competing companies that agree to work together in a limited and legal way. That makes a discussion of antitrust topics particularly problematic.

Enforcement and penalties

The U.S. Department of Justice Antitrust Division prosecutes serious and willful violations of the antitrust laws by filing criminal suits that can lead to large fines and imprisonment. In other cases, the Justice Department or the Federal Trade Commission can file civil action seeking to forbid future violations and remedy the anticompetitive effects of past violations. Antitrust lawsuits can also be brought by private parties and state attorneys general.

The language of conspiracy is in place whenever two or more people appear to be working together to control price, injure another business or limit market access.

The moral: Practice safe speech by thinking before you speak.

Source: Florida Realtors