National Real Estate Exam (PSI)Practice of Real EstateHard
A large brokerage tells smaller independent brokers that it will refuse to cooperate on any transactions with a particular discount brokerage unless the other brokers also refuse. This coordinated refusal to deal is an example of:
- APrice fixing
- BTying arrangement
- CGroup boycott
- DRedlining
Show answer & explanationAnswer & explanation
Correct answer: C. Group boycott
A group boycott occurs when two or more competitors agree to refuse to deal with another business, such as excluding a discount brokerage from cooperative transactions. This is a per se antitrust violation under the Sherman Act.
Why the other options are wrong
- A. Price fixing involves setting uniform prices, not refusing to work with someone.
- B. Tying requires forcing purchase of one product to obtain another.
- D. Redlining is a lending discrimination practice unrelated to broker cooperation.
Group Boycott
An antitrust violation where competitors coordinate to refuse business dealings with a targeted competitor or firm.
- Per se illegal under Sherman Antitrust Act
- Often targets discount or non-traditional brokerages
- Requires coordination among two or more parties
Memory trick: Boycott = 'block-out' a competitor by group agreement