Two managing brokers from different brokerage got together to play golf. During their private round of golf, the two brokers quietly decided to that the commission rates for the two brokerage firms should match. This is an example of:
Illegal behavior under the Sherman Antitrust Act.
Quietly fixing brokerage firm commissions is the anti-competitive, collusive behavior that the federal Sherman Antitrust Act made illegal in 1890.
A is incorrect. Since the federal Sherman Antitrust Act of 1890 was enacted, firms (including real estate brokerage firms) have been legally prohibited from engaging in anti-competitive activity like fixing prices, fees, or commissions. Other prohibited acts include dividing up geographic territories or boycotting brokers offering cut-rate discounts. C is incorrect. There is nothing in the test question to suggest that the two brokers are engaging in housing discrimination. D is incorrect. The Statute of Frauds is not related to price fixing. The Statute of Frauds requires certain contracts and agreements be formalized in writing in order to be enforceable in a court of law.
