The Australian Competition and Consumer Commission has issued a draft notice proposing to revoke a notification* concerning advertising contracts the Wentworth Courier,** a free weekly community newspaper delivered to households and businesses in the eastern suburbs of Sydney, offers to real estate agents within its circulation area.
Under the contracts real estate agents agree to place 75 per cent of their print display real estate advertising for properties in its circulation area with the Wentworth Courier in consideration for significantly discounted advertising rates.
"It is not uncommon for publishers to offer advertisers volume based rebates", ACCC Chairman, Mr Graeme Samuel said.
"However, the Wentworth Courier's advertising contracts go much further than this. In effect, the advertising contracts prevent real estate agents from placing more than 25 per cent of relevant advertising with competing publications."
"Real estate agents are offered the opportunity to advertise in the Wentworth Courier without agreeing to the 75 per cent requirement. However, the prominence of the Wentworth Courier as an advertising platform for real estate in eastern Sydney and the discounts provided to real estate agents who agree to the 75 per cent requirement mean that agents who do not agree to the requirement are significantly disadvantaged in competing for vendors business."
"The 75 per cent 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."
"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."
"As a consequence, other publications are unlikely to act as a significant competitive constrain on the terms and conditions offered to real estate agents by the Wentworth Courier."
While the 75 per cent requirement does not restrict real estate agents in advertising through other mediums, such as the internet, these other mediums are generally not close substitutes for print display advertising.
"The ACCC has formed the preliminary view that the 75 per cent requirement is likely to have an anticompetitive effect and does not have net public benefits," Mr Samuel said.
While the arrangements have been in place for a number of years the ACCC has reviewed the notification in light of recent concerns raised regarding the 75 per cent requirement.
The Wentworth Courier and interested parties now have time to lodge submissions in response to the draft notice, before the ACCC decides whether to issue a final notice revoking the notification.
More information regarding the notification and a copy of the draft notice will be available from the ACCC's website, or by emailing the Adjudication Branch at adjudication@accc.gov.au.