Real estate agencies and their clients should have more choice and flexibility in their listing options for the sale and rental of Australian properties after the ACCC accepted a court-enforceable undertaking from REA Group Ltd (ASX:REA). The undertaking commits REA to remove restrictive provisions from its contracts with real estate agencies.
The ACCC was concerned that REA's contracts with real estate agencies contained anti-competitive restrictions, including clauses that required all properties to be listed on realestate.com.au, and that this limited the ability of REA's rivals to compete.
"REA's undertaking resolves this issue in a timely manner and addresses our concerns. We expect that ultimately the benefits will flow from the real estate agents to their clients, Australian property owners," ACCC Chair Gina Cass-Gottlieb said.
This undertaking means that REA will not be able to require or incentivise real estate agencies to list all or most of its properties on REA's realestate.com.au website.
"Because of the ACCC's intervention, REA will give greater flexibility to agents in how their vendor and landlord clients list their properties for sale and rent," Ms Cass-Gottlieb said.
Previously, under most of REA's contracts, real estate agencies were locked into listing all their properties for sale or lease on realestate.com.au. In addition, REA's contracts required or incentivised real estate agencies to list all or a portion of their properties with features that attracted higher fees.
"This is a win for competition in the real estate listing market and is expected to enable real estate agents to offer their vendor or landlord clients the listing service that best meets their property advertising needs," Ms Cass-Gottlieb said.
The ACCC considers that the provisions in REA's contracts had the effect of limiting its customers' choices and hindering other listing services from effectively competing.
"We encourage vendors and landlords to discuss available listing options with their agents following REA's undertaking, so they can consider the different listing options and fees on different portals to determine what best suits them," Ms Cass-Gottlieb said.
REA has acknowledged the ACCC's concerns that its conduct may have been in breach of competition law, and has committed to make changes to its operations for three years under the court-enforceable undertaking accepted by the ACCC.
The ACCC heard from many real estate agents who were concerned about REA's contract requirements.
"The ACCC will continue to prioritise investigating companies entering agreements with restrictive provisions which hinder competition, and will always take a strong stance on these issues," Ms Cass-Gottlieb said.
The undertaking is available on the ACCC website.
Background
REA is an ASX-listed company incorporated in Australia which owns and operates the website published at "realestate.com.au" through its subsidiary realestate.com.au Pty Ltd.
REA supplies online residential real estate listings on a searchable database to real estate agencies in Australia through its portal, realestate.com.au.
The REA portal is Australia's largest online residential real estate listing portal.
Listing services supplied to real estate agencies allow individual real estate agents to advertise (on behalf of their vendor and/or landlord client) a property for rent or sale on the REA portal.
- The ACCC was concerned that the restrictive provisions in REA's contracts with real estate agencies may have been in breach of section 45 of the Competition and Consumer Act, which prohibits anticompetitive agreements.
