The Supreme Court has written the final chapter in the Lodge/TradeMe anti-competition case. It found there was an understanding between realtors to pass on the TradeMe fee to vendors rather than absorb that cost internally. The Supreme Court held that was price fixing in breach of s 27 Commerce Act. The realtors argued that they went into a meeting in September 2013 having already individually concluded they would not absorb the increased TradeMe fee, so that what happened at the meeting was nothing more than collective confirmation of their individual positions or “conscious parallelism”. The Supreme Court rejected that position principally on the basis that at the time of the meeting the attendees had not finalised their response to the TradeMe price increase.

The realtors also argued they were not controlling the price, because it was only a small amount of the overall price ($159 when the average charge for selling a house in Hamilton was $15,000 (1.06%)). They also said there was no controlling of the price because there was only agreement that the agency itself would not absorb it. There was no agreement as to how the fee would ultimately be paid which could include the individual agent paying or the vendor paying. Again, the Supreme Court rejected those arguments. It held that although the arrangement related to a mathematically small component of the overall charges, it was a significantly sufficient component of the overall price to bring the arrangement within the ambit of s 30. It indicated that the degree to which the understanding controlled the overall price might go to penalty. However, we note in this case most of the penalties have been over $1m, which does not seem to reflect that approach.

Although the Court found that mere conscious parallelism does not breach s 27, the reality is that any agreement amongst competitors about any aspect of price is likely to be seen as price fixing. It counts for little that the competitors were attempting to stop a dominant supplier increasing its price to the detriment of the users of their service. It also counted for nothing that the competitors were promoting competition.

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