Question

Four brokerage firms operate in the same small city as Jackson’s firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?

Answer 1

No, this situation does not necessarily constitute an antitrust violation. In a competitive market, similar pricing and commission structures can be a result of market conditions rather than collusion.

Step-by-step explanation:

No, this situation does not necessarily constitute an antitrust violation. In order for an antitrust violation to occur, there must be evidence of collusion or an agreement among the brokerage firms to manipulate prices or allocate clients. If all the firms are charging similar listing commissions and paying similar cooperating commissions, it could simply be that they are operating in a competitive market with similar cost structures and market conditions. Without clear evidence of anti-competitive behavior, it would be difficult to claim an antitrust violation.

Answer 2

Yes, this is antitrust violation. Because, the tend to restrain trade in that small city thereby denying other small player brokerage firms from making a living due to their monopolistic actions among themselves.

Step-by-step explanation:

Antitrust laws are designed in-order to prohibit a number of business practices that restrain trade. Examples of illegal practices are price-fixing conspiracies, corporate mergers that are likely to cut back the competitive fervor of certain markets, and predatory acts designed to gain or hold on to monopoly power.

Violations of such laws attract sanctions and punishment from the regulatory body in-charge of protecting such.