4.3 Sherman Antitrust Act: Price Fixing & Group Boycott Prohibitions

🎯 Key 2026 Real Estate Exam Takeaways

• Agreements among competing brokerages to establish, fix, or stabilize commission rates are per se illegal criminal price fixing.
• Concerted agreements among competitors to boycott discount or flat-fee brokerages violate the Sherman Act.
• Claiming that commission rates are 'standard,' 'going,' or 'mandated by the MLS' is deceptive trade misrepresentation.

Section 1 of the Sherman Antitrust Act (15 U.S.C. § 1) prohibits contracts, combinations, or conspiracies in restraint of trade. In real estate brokerage, the Supreme Court established decades ago (United States v. National Association of Real Estate Boards) that commercial real estate brokerage is subject to federal antitrust laws.

Horizontal price fixing—an agreement between competing brokerages to set, fix, or stabilize commission rates, fee schedules, or minimum charges—is classified as per se illegal. This means the practice is inherently unlawful without requiring proof of actual harm or economic reasonableness. Violations carry severe criminal penalties: corporate fines up to $100 million, individual fines up to $1 million, and up to 10 years in federal prison.

Similarly, collective group boycotts (concerted refusals to deal) are strictly illegal. If competing brokers collectively agree not to show listings from a discount competitor, or agree to withhold cooperation from a flat-fee firm, they commit a per se antitrust violation. Brokers must independently determine their business relationships without colluding with competitors.

⚠️ Common Licensing Exam Traps

• Never discuss commission rates, fee minimums, or business splits with agents from other brokerages at social or association events.
• Remember that while a single firm may unilaterally set its own internal fee policy, agreeing with another firm is a criminal antitrust felony.