Let’s try this: “Founded in 1971, Starbucks is a “paper” coffee shop, which means that the company does not itself sell coffee anywhere, but rather matches customers with competing coffee shops in their network across all 50 states who have agreed to both pay Starbucks a 25 percent of their sales by any customer who walks into an empty retail store. For all coffee shops in their network, Starbucks fixes all prices for Caffe Americano at $1, rather than the typical $2.65″
Obviously, the example above is a flat out lie. Starbucks is a business that sells legitimate products, like coffee, and fairly competes against other coffee shops locally. This example shows how ridiculous Andrea V. Brambila’s article sounds when we remove the #Realtor notions form the equation and think of any other business sector, anywhere else.
What is a “paper” brokerage, exactly?
In United States antitrust law, a “hub and spoke conspiracy” is a term of art used to describe horizontal conspiracies that include participants who are in a vertical relationship with one or more of the competitor conspirators.