Keeping Out the Competition

Posted on May 13, 2005
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Realtors are trying to limit online real estate listings to keep out online brokers, who often charge less than the traditional full-service 6 percent commission. The U.S. Justice Department is investigating whether the practice is anti-competitive and violates anti-trust laws.  

This is just the latest example of an industry seeking to block internet commerce. Wine distributors have similarly impeded online purchases and interstate shipping. The U.S. Supreme Court recently heard a case involving the scheme. The Goldwater Institute submitted an amicus brief arguing that such restrictions are unconstitutional and deny consumers the benefits of a free market: more choice, greater convenience, and lower prices.

Although e-commerce sales have risen, traditional brick-and-mortar retailers and wholesalers oppose increased internet transactions. In testimony before the U.S. House of Representatives, Ted Cruz, director of the Federal Trade Commission Office of Policy and Planning, stated that existing businesses may be using government authority to keep out competition from new entrants. Thus, American consumers are paying a minimum of $15 billion more for goods and services as a result of e-commerce prohibitions.

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