CADE convicts entities of the real estate sector for agreement among competitors

On 25 October 2023, the Administrative Council for Economic Defense (CADE) convicted the regional council of real estate agents (CRECI) in the state of Mato Grosso do Sul and ten real estate associations in the states of Paraíba, Rondônia, Mato Grosso do Sul, and Rio de Janeiro for agreements among competitors in the real estate market.

In 2015, the Office of the Superintendent General (SG/CADE) analysed if the federal council of real estate agents (COFECI) and 22 regional councils also engaged in anticompetitive conducts, in response to practices from other professional categories. CADE also investigated an alleged cartel from associations in the markets of the states of Goiás, Mato Grosso do Sul, Rondônia, Paraíba, and Rio de Janeiro.

Among the evidence, there are normative resolutions published by COFECI, imposing the fee schedules developed by the realtors' associations and approved by the regional councils. It also examined mandatory exclusivity clauses in real estate contracts.

The investigation also found that the regional councils would conduct inspections to ensure compliance with the regulation. Some of those councils launched disciplinary actions of ethical violations against realtors due to non-compliance with the fee schedule.

According to the rapporteur of the case, Commissioner Luis Braido, there are potential anticompetitive conducts, through price-rigging fee schedules, to the detriment of free competition and consumers.

Mr. Braido stated that the conduct "aimed to harm free competition and consumers by promoting price-rigging and negative economic impact”. He highlighted that councils and associations are hold accountable for the violations, as the entities co-signed the fee schedule and imposed fixed prices.

The parties involved are to pay fines amounting to BRL 825 thousand.

Agreements

In 2018, COFECI and 22 regional councils signed a cease and desist agreement with CADE. The parties committed not to impose fixed prices in Brazil, among other obligations, and to terminate disciplinary action in case of non-compliance with the fee schedule. The agreement established that COFECI is to pay BRL 75 thousand.

The Tribunal of CADE dismissed the case—except for CRECI-MS, which failed to fulfil the agreement and was found guilty.

Access Case no. 08700.004974/2015-71.