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Practice of Real Estate term

Group Boycott

An illegal antitrust violation where competitors agree to exclude another business from fair competition.

Why Group Boycott matters on the exam

This term belongs to Practice of Real Estate. The questions below are real items from Freehold's bank that use it - each one cites its source.

Exam questions using Group Boycott

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A group of brokers agree among themselves to refuse to show properties listed by a discount brokerage that charges lower commissions. This conduct is best described as:

  1. An illegal group boycott under antitrust law
  2. A lawful business decision each broker is free to make independently
  3. A permissible rule the local multiple listing service may adopt
  4. Steering, directing buyers away from a discount brokerage's listings
Show answer & explanation

An illegal group boycott under antitrust law — Competitors agreeing to collectively refuse to deal with a business, such as a discount brokerage, is a group boycott, which is a per se violation of federal antitrust law.

Source: Sherman Antitrust Act (15 U.S.C. §1)

Several brokerages jointly agree to stop referring clients to a particular home inspector because he offered his services at a lower price than they preferred. This is an example of:

  1. A legitimate quality control measure
  2. Acceptable vendor management
  3. An illegal group boycott
  4. Redlining
Show answer & explanation

An illegal group boycott — Competitors jointly agreeing to exclude a business from the market, here punishing a vendor for pricing decisions, is a group boycott and a per se antitrust violation.

Source: Sherman Antitrust Act (15 U.S.C. §1)

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