Rod Sims, the former chair of Australia’s competition law enforcer, says he believes the regulator should consider investigating the behaviour of the market’s leading real estate property portal, realestate.com.au, for potential anti-competitive behaviour.
The Greens have also hit out at what they say is an alleged “outrageous abuse of market power”, saying the price hikes arising from REA Group’s dominance underscored the need for new price-gouging laws.
Sims, who chaired the Australian Consumer and Competition Commission for more than 10 years until 2022, said the regulator could investigate whether the practices revealed by Guardian Australia were lessening competition to the detriment of consumers.
Under Australian consumer law, a corporation must not make a contract or arrangement that has “the purpose, or would have or be likely to have the effect, of substantially lessening competition.”
A Guardian Australia investigation has revealed that industry disruptors feel they are being significantly disadvantaged by the practices and pricing structures of realestate.com.au and, to a lesser extent, Domain, claiming they cannot compete on a level playing field with traditional real estate agents.
“This behaviour seems well worth considering under section 45 of the Competition and Consumer Act,” Sims told Guardian Australia.
The former commissioner, who is now a professor in the practice of public policy and anti trust at the Australian National University’s Crawford School of Public Policy, also said he believed that a previously rejected application for collective bargaining by real estate agents in dealing with realestate.com.au might now be successful.
Sims was commissioner at the time the application by Property Media Group was rejected, when concerns were raised by the industry that prices being offered to agents and consumers were “high and disproportionate” with a lack of competitive negotiation.
“It does seem to me that this is a case where a collective boycott might now be allowed by the ACCC,” Sims told Guardian Australia.
“I suspect the attitude to collective boycotts has now changed, and so such an application may now have more chance of success.”
The Greens’ economic justice spokesperson, Nick McKim, told Guardian Australia that the party’s proposed legislation to outlaw price gouging, which was flagged in the Senate last week, was needed to address a system “rigged in favour of big corporations”.
Under the proposed laws, which mirror those in the European Union, the ACCC would have powers to apply for an order to the federal court if it believed a company had engaged in price gouging.
“Corporations hiking prices just because they can is exactly why we have introduced legislation to make price gouging illegal,” McKim said.
“Successive weak governments have stood by and watched monopolies and duopolies grow unchecked, allowing them to drive up costs.
“The result is a system rigged in favour of big corporations at the expense of ordinary Australians.”
Sophie Scamps, independent MP for the Sydney seat of Mackellar, also backed the need for the ACCC to look at prices being charged by Australia’s property portals after Guardian Australia revealed Australians were paying the highest online advertising costs in the world when selling their homes.
“There are already too many barriers to people selling and downsizing their homes, so it’s disturbing to hear that Australians yet again are apparently paying inflated prices to have their house placed on real estate marketing platforms,” Scamps told Guardian Australia.
“As in the case of the supermarket duopoly, the ACCC needs to investigate the prices being charged for using such an essential service.”
REA Group declined to comment.
