Hong Kong’s Midland Realty faces legal action over alleged sales commission fixing in unprecedented action against industry
- Competition Commission says it is taking legal action against Midland Realty Holdings and two subsidiaries
- Midland’s rival Centaline Property Agency was also implicated, but will receive leniency after ‘fully cooperating’ with antitrust watchdog investigation
Hong Kong’s antitrust watchdog is taking legal action against one of the city’s two property agency giants for allegedly fixing sales commissions in an unprecedented action against the industry.
The Competition Commission on Tuesday accused Midland Holdings and two subsidiaries of directing agents to charge a minimum net commission rate of 2 per cent for first-hand residential properties starting on January 1.
The watchdog said Midland had conspired with arch-rival Centaline Property Agency and its subsidiary Ricacorp Properties, which were granted leniency in exchange for “fully cooperating” with the investigation and “providing substantial assistance”.
“The industry … must understand that no matter how many decades a certain custom has been adopted, a breach of the regulations is still a breach of the regulations,” said Samuel Chan Ka-yan, chairman of the commission.
Property sales were a “crucial part” of the economy and the impact of the alleged practices was believed to be “immense”, he added.