U.S. DEPT OF JUSTICE LETTER TO KANSAS REAL ESTATE COMMISSION

3 Under K.A.R. 86-3-32, “rebate” is defined to include “cash equivalent[s],” which in tum are defined as “gift cards, prepaid credit cards, and any other item with a value equal to a specific amount of money that can be used in the same manner as that for cash.” The proposed regulation also states that”‘rebate ‘shall not include any gift…that is not promised or agreed to by the licensee and the client or customer in advance.”

4 Under antitrust law, restrictions on price competition are generally viewed with great skepticism. Agreements prohibiting price competition are normally treated as per se illegal-even where the agreement forbids one form of price competition (like rebates or gift cards) but not all forms o f price competition. See, e.g., Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 648-49 (1980) (holding that agreement by wholesalers to eliminate interest-free credit was illegal perse). Suchrestrictionsarenotexemptfromtheantitrustlawswhentheyareeffectuatedbystate boards controlled by active market participants that did not receive active supervision from the state’s government. North CaroUna Bd. ofDental Exam ‘rs v. F. T.C., 135 S.Ct. 1101, 1110 (2015).

5 We also note that Kansas law previously contained a separate provision that barred licensees from offering “gifts or gratuities which are contingent upon an agency agreement or the sale, purchase or lease of real estate.” S. 404, 80th Leg. §3(11) (Kan. 2004). The Kansas legislature repealed this prohibition in 2004. Id. Proposed regulation K.A.R. 86-3-32 seems to have the same effect as the prohibition that the legislature has already eliminated. This legislative history offers another consideration that may counsel in favor of interpreting Kansas law to allow brokers to offer gift cards to home buyers, even when those gift cards are agreed to in. advance by the broker and home buyer.