ACCC denies PMG collective bargaining boycott on property website ads

The Australian Competition and Consumer Commission has issued a draft determination proposing to deny authorisation to Property Media Group Pty Ltd (PMG).

PMG is seeking to collectively bargain and boycott suppliers of online and print real estate advertising, including realestate.com.au and domain.com.au.

PMG made the application for authorisation on behalf of itself and 170 real estate agents ranging from individual agents to representatives of large franchise groups.

“While the ACCC considers that collective bargaining and boycott action can be in the public interest in certain circumstances, we are not satisfied that the conduct proposed by PMG would result in significant public benefits,” ACCC Commissioner Roger Featherston said.

“The ACCC is particularly concerned by the potential size and scope of collective bargaining groups and boycott activities, combined with uncertainty about how PMG will ultimately conduct negotiations and implement any boycotts.”

PMG has sought authorisation for the conduct because it sees realestate.com.au and domain.com.au as having significant market power, charging excessive prices and essentially forcing real estate agents on to premium contracts.

However the ACCC considers that while realestate.com.au and domain.com.au have some market power, there is evidence of competition, both between each other and from other small and mid-tier players. The ACCC also received information which shows that real estate agents can and do enter into a diversity of contracts and listing types, including within the same region.

The ACCC is now seeking submissions from Property Media Group and interested parties in relation to its draft determination, before making a final decision, expected in October 2016.

Background

PMG seeks authorisation for proposed Australia-wide collective bargaining and boycott arrangements, which will commence within regions of Victoria. In particular, PMG seeks authorisation on behalf of a large number of real estate agents and franchisors of real estate groups to collectively negotiate terms, conditions and fees with any suppliers of online or print residential real estate advertising in Australia.

It also seeks authorisation for agents to boycott realestae.com.au or domain.com.au in certain circumstances.  A collective boycott involves two or more competitors agreeing not to acquire goods or services from a target supplier. In this case, PMG has indicated that a boycott may include agents agreeing not to acquire premium property listings, or participating agents in a region agreeing not to enter into contracts with a real estate platform. However, PMG would have broad discretion to select what kind of boycott activities for real estate agents to engage in, including the possibility of a national boycott of a real estate advertising platform by all of the participating real estate agents. 

The ACCC is now seeking submissions from Property Media Group and interested parties in relation to its draft determination, before making a final decision, expected in October 2016.

Further information, including a copy of the draft decision, is available from the ACCC’s Public Register: Property Media Group Pty Ltd - Authorisation - A91537 & A91538

Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act (2010).

About the authorisation process:

• Generally, the ACCC can grant authorisation if it is satisfied that the public benefit from the conduct outweighs any public detriment, including any lessening of competition.
• The ACCC is required to publish a draft decision (‘determination’) in relation to an application. This is usually 3–4 months after receiving an application.
• The ACCC will conduct public consultation with interested parties both before and after a draft determination.
• The ACCC will generally release its final decision (‘determination’) 5–6 months after receiving an application.