Texas Real Estate Sales Agent ExamReal Estate PracticeHard
A real estate broker has established a policy that all agents in the office must use the same standard commission rate for listings, and any deviation from this rate must be approved by the broker. If the broker then enters into an agreement with other local brokers to maintain these similar rates across their respective offices, what antitrust violation could occur?
- ATie-in arrangement
- BGroup boycott (internal)
- CMarket allocation (internal)
- DPrice fixing
Show answer & explanationAnswer & explanation
Correct answer: D. Price fixing
While a broker can set internal commission policies for their own agents, an agreement with other competing brokers to maintain similar rates constitutes price fixing, a per se violation of the Sherman Antitrust Act. The key is the agreement between independent competitors.
Why the other options are wrong
- A. A tie-in arrangement involves conditioning one service on the purchase of another, which is not described here.
- B. A group boycott involves refusing to do business with a third party. The scenario describes an agreement on prices, not a refusal to deal with someone.
- C. Market allocation involves dividing territories or clients, not agreeing on prices.
Antitrust - Price Fixing (Inter-broker)
Price fixing occurs when competing real estate brokers agree to establish or maintain uniform commission rates or other fees, which is a per se violation of the Sherman Antitrust Act.
- Illegal agreement among competitors.
- Applies to commission rates, listing fees, etc.
- Per se violation, meaning no justification is allowed.
Memory trick: Brokers unite for a fair fight, not a fixed price!