Leading Spanish property portal Idealista has been fined 730,000 Euros (US$ 820,000) for what has been described as a series of agreements to fix prices and exchanging information with real estate brokerages.
The country’s National Commission of Markets and Competition (CNMC) also levied fines of five real estate firms, and alleged these companies used a Multiple Listings System (MLS) to allow users to share properties captured under a shared exclusive agreement.
In a statement, Idealista stressed that the CNMC did not point to them agreeing commissions but, on the contrary, confirmed what the firm had always defended:
It said the object of the investigation that the CNMC began almost two years ago has nothing to do with the use of malicious algorithms to manipulate prices.
“At no time does the CMNC state that Idealista established, influenced or altered the prices nor the commercial conditions of the properties that are advertised in it”, but rather “expressly recognised that Idealista is a company that does not operate directly in the real estate brokerage market.”
The franchisors who developed this MLS system approved a mandatory regulation for real estate users that required a minimum commission of 4% on sales and one month on rents. It also imposed a 50% commission distribution between the property’s capturing office and the one that closed the transaction. Breaking these rules could lead to disciplinary sanctions and even the suspension of associate status.
The implementation of software that allowed tracking of real estate fees captured from competitors, and access to sensitive information among them, made it possible to ensure the application of the system in the real estate market, which is characterised by being atomised on the supply and demand side.
Consequently, both regulations and software developments limited competition between real estate companies by establishing minimum commissions and other commercial conditions, and generating a level of transparency incompatible with the necessary competition between entities.
Those entities that were not willing to accept the anti-competitive rules contained in the regulations were excluded from the benefits of the MLS system.
The investigation focused on the legality of the agreements between specific agencies to supposedly set minimum service commissions in sales transactions, and on the use they made of three real estate software, among them Tools, the Idealista software.
“The CNMC considered that Tools, like the other real estate software, is mere ‘necessary collaborators or facilitators’, but in no case did it link the software with the creation of the platform or with the alleged setting of commission prices. Tools was only penalised for configuring and facilitating a filter, not even for the general use that agencies make of this software “, the authority stated.
They also clarified why the portal received the lowest penalty in percentage terms.
It said: “The amount of 730,000 Euros which the CNMC sanctions Idealista is the result of applying the lowest percentage to idealista’s billing, the highest of the investigated companies.”
Other fines were issued to Remax, Inmovilla, Look & Find, Witei and Anaconda totaling 511,000 (US$ 574,000).