Huge fines for estate agency chains

The State Prosecutor for Serious Economic and International Crime (SØIK) has issued a total fine of millions to five estate agency chains, bringing to a close the investigation of a set of cases regarding a criminal agreement between estate agency chains in Denmark which, in contravention of the Danish Competition Act, have boycotted the Boliga.dk housing portal. This was announced by Public Prosecutor Morten Niels Jakobsen.

»The purchases and sales of our homes are essential economic events, which, to most people, only happen a few times in a life. It is therefore of paramount importance that we can count on fair play in the housing market. The size of the fines in this case reflects the fact that these are serious infringements of the law intended to ensure proper competition in the housing market in Denmark," says Public Prosecutor Morten Niels Jakobsen.

The Boliga case was brought before the Competition Council and then referred to SØIK as it concerned criminal conduct.

"Boliga.dk was the first portal to publish sales periods, prices and final sales prices, and in so doing it created transparency in the real estate market. According to the Competition Council's decision, a large part of the estate agency industry did not find this reasonable or desirable," says Jakob Hald, Director General of the Competition and Consumer Authority.

After being in contact with SØIK, most of the estate agency chains involved in the set of cases chose to accept the fines. They and the judiciary system are thus avoiding costly criminal proceedings in court. These include Home, DanBolig and Nybolig, each of which has accepted a fine of DKK 3.75 million. RealMæglerne has accepted a fine of DKK 0.5 million. Danske Selvstændige Ejendomsmæglere (an association of independent estate agents) has accepted a fine of DKK 80,000. From each of the five companies, a senior executive has accepted a personal fine of DKK 25,000 for their part in the infringement. In addition, a senior executive from EDC has accepted a personal fine of DKK 25,000.

"We’ve now closed most of the cases with the estate agency chains involved in this important set of cases. We’ve had good dialogue with the agencies and their lawyers, and listened to the comments they put forward. Almost everyone in the cases has now opted to pay large fines. The sizes of the fines are within the level which, according to the prosecution's assessment, they should expect under current legal practice," says Public Prosecutor Morten Niels Jakobsen, stressing that the option to have the case tried by the courts, and thus enjoy the guarantee of due process inherent in the courts having the final say, is an option which the companies always have in relation to a fine.

EDC-Gruppen A/S and The Danish Association of Chartered Estate Agents did not wish to accept a fine. SØIK will therefore initiate a criminal case, which will be referred to the court once an indictment has been prepared.

BACKGROUND

In 2009, the Danish Association of Chartered Estate Agents and the estate agency chains behind the housing portal Boligsiden.dk agreed to encourage their agents to boycott Boliga.dk to protect Boligsiden.dk from competition. Among other things, the boycott meant that the agents should not make advertising photos of the homes available to Boliga.dk.

In 2012, the Competition Council ordered the Danish Association of Chartered Estate Agents and the estate agency chains to desist from any kind of agreement to refuse Boliga.dk access to displaying photos of the homes, which the real estate agents had up for sale.

The Competition and Consumer Authority then reported the case to the Public Prosecutor for Serious Economic and International Crime (SØIK).