ACCC revokes immunity for Wentworth Courier real estate advertising contracts
The Australian Competition and Consumer Commission has issued a notice revoking a notification* concerning real estate advertising contracts with the Wentworth Courier** in eastern Sydney.
Under the contracts real estate agents agree to place 75 per cent of their total print display advertising (by centimetre volume) for properties in the eastern suburbs with the Wentworth Courier. In return, contracted agents receive significantly discounted advertising rates and an annual volume rebate from the Wentworth Courier.
"These contracts go beyond publishers offering volume discounts to advertisers," ACCC Chairman, Mr Graeme Samuel said.
"The contracts directly limit the volume of print display advertising that real estate agents advertising properties in the eastern suburbs can place with competing publications."
Another feature of the contracts is that agents are prevented from recommending or inducing a vendor to place print display advertising in any other publication. While the 75 per cent requirement does not restrict real estate agents advertising through other mediums, such as the internet, these other mediums are generally considered as 'add-ons' to advertising in the Wentworth Courier.
The majority of real estate agents in the eastern suburbs have contracts with the Wentworth Courier. The 'must have' status of the Wentworth Courier as an advertising platform for real estate in eastern Sydney and the larger discounts provided to real estate agents who agree to the 75 per cent requirement, means that agents who do not agree to the requirement are significantly disadvantaged in competing for vendors' business.
"The ACCC considers the requirement all but forecloses the possibility of another local community newspaper effectively competing with the Wentworth Courier to supply print display advertising to eastern Sydney real estate agents. Even an offer of free advertising would fall within an agent's total print display advertising centimetre volume and is therefore counted in the 75 per cent requirement.
"The requirement also severely restricts the ability of Sydney daily newspapers, such as the Domain East insert in the Sydney Morning Herald, to compete for this business.
"The ACCC is not satisfied that there is a benefit to the public generated by the requirement that agents place 75 per cent of their total advertising centimetre volume with the Wentworth Courier. The Wentworth Courier may still be able to offer standard volume discounts to real estate agents, as currently occurs in other publications.
"Importantly, the current advertising discounts offered by the Wentworth Courier are not necessarily lower than those that would be offered in a more competitive environment."
The arrangements have been in place for a number of years. The ACCC's review of the notification followed the receipt of a complaint about the 75 per cent requirement.
More information regarding the notification and a copy of the notice are available from the ACCC's website, or by emailing the Adjudication Branch at adjudication@accc.gov.au.
*By lodging an exclusive dealing notification with the ACCC, a party obtains immunity from court action for that conduct. In this case, immunity is conferred automatically when the notification is lodged. The ACCC can review a notification at any time. In doing so, it reviews the purpose and effect of the notified conduct. If the ACCC forms the view that the conduct substantially lessens competition, and that it does not deliver a net public benefit, it may issue a draft notice proposing to revoke the notification. After considering any submissions from interested parties in response to the draft notice, and conducting a conference if any of the interested parties call for a conference, the ACCC must decide whether to issue a final notice.
**The Wentworth Courier is part of the Federal Publishing Company Community Media Group, now called the Courier Newspaper Group, which was a division of the Eastern Suburban Newspapers partnership, a partnership of a number of subsidiaries of F Hannan Pty Ltd. The FPC was acquired by News Limited in April 2007.
