Market allocation Flashcards
What is market allocation in the context of antitrust violations?
Market allocation occurs when real estate professionals from competing firms agree to divide their market by geography, price range, property type, etc., and refrain from competing for business.
This practice restricts trade and violates antitrust law.
Give an example of how market allocation was commonly practiced between brokerage firms.
Brokerage firms would agree, ‘you take the north side of town, we’ll take the south.’
This practice prevented firms from competing in the same areas.
What are the consequences of market allocation agreements?
They restrict trade, discourage competition, and restrict consumer choice.
Such agreements violate antitrust law.
True or False: Making independent decisions about service areas is illegal.
False.
Independent decisions are legal as long as they are not discriminatory.
What distinguishes legal independent decisions from illegal market allocation agreements?
Legal independent decisions are made without discrimination and not based on agreements with competing brokers.
Illegal agreements can be written or oral.
