The International Yacht Brokers Association is facing a class-action lawsuit from a boat seller that alleges a conspiracy to inflate broker commissions in violation of the Sherman Antitrust Act.
Additional defendants named in the federal lawsuit include numerous brokerage firms, the listing service Yatco and Boats Group, which is the parent company of YachtWorld, Boats.com and Boat Trader.
IYBA chief operating officer Paul Flannery issued a statement Monday: “We are aware of the complaint, which does not provide an accurate portrayal of the yacht brokerage industry, including by suggesting that selling yacht brokers are required to pay the commissions of brokers representing yacht purchasers, or that there exists any conspiracy to inflate any commissions.”
The case was filed in the U.S. District Court for the Southern District of Florida. The plaintiff is Ya Mon Expeditions LLC, which is described as a yacht seller that listed the 58-foot sportfish Click Bait for sale through Florida-based Tournament Yacht Sales. The listing agreement, according to the lawsuit, included a non-negotiable 10% commission.
Click Bait sold for $1 million, and the buyer’s broker was also with Tournament Yacht Sales, resulting in the 10% commission being split between brokers at the same company, according to the lawsuit: “But for the conspiracy among the Defendants, YME would not have been forced to pay an inflated broker commission.”
The lawsuit compares the listing service for yachts to services in the residential real-estate market, and comes amid legal actions regarding a National Association of Realtors policy that requires a listing agent on a home for sale to pay a fee to a buyers’ agent when a home is sold. That fee is nearly always passed on to the home seller.
In October 2023, a federal-court jury in Missouri found that the National Association of Realtors, along with two brokerage firms, were liable for $1.8 billion in damages for conspiring to keep commissions artificially high. The New York Times reported that under the verdict, sellers would no longer be required to pay their buyers’ agents, and agents would be free to set their own commission rates, which could be slashed in half or less. The National Association of Realtors is challenging the verdict.
The marine-industry lawsuit states: “Defendants’ conspiracy has kept buyer-broker commissions in the 4% to 5% range, artificially and anticompetitively elevated beyond where they would be in a market free from Defendants’ conspiracy, for many years, despite the diminishing role of buyer-brokers. Many yacht buyers no longer search for prospective vessels with the assistance of a broker, but rather independently through online services.”
Soundings Trade Only requested comment from numerous named defendants, including Northrop & Johnson, Galati Yacht Sales and HMY. None immediately responded.
Additional named defendants include the Yacht Brokers Association of America, United Yacht Sales, Allied Marine, MarineMax, RJC Yacht Sales, Tournament Yacht Sales, Permira Advisers, and Sharon & Jack Malatich LLC.
