The CMA has issued an open letter warning Estate agents that agreeing with rivals which property portals to list on may break competition law.
The move comes after the Competition and Markets Authority became aware that some Estate Agents “may be making joint decisions to join the OnTheMarket portal and to remove their business from competing portals”, rather than reaching these decisions independently of each other.
OnTheMarket launched in 2015 with the explicit aim of tackling the perceived duopoly of the portals Rightmove and Zoopla – primarily through the use of a specific clause in clients’ contracts that banned them from listing properties on more than one other site.
However, the CMA has warned that some agents may have been colluding over which portal to join – and that it has already contacted those suspected of such activity. It is also working closely with the National Association of Estate Agents, The Property Ombudsman, Ombudsman Services: Property and the Property Redress Scheme to raise awareness of the issue.
“The online portals on which properties are listed is an important aspect of competition between estate agents and the choice of portal must be decided independently and not agreed with competitors,” cautioned Ann Pope, CMA Senior Director Antitrust. “Estate agents that are found to be breaking competition law in this way could face significant fines.”
The CMA noted, however, that it has “no reason to write to OnTheMarket in this connection at this time”.
Russell Quirk, Founder and CEO of agent eMoov.co.uk (which OnTheMarket refused to advertise listings from because it is an online estate agent), commented: “The first thing that strikes me about this latest announcement is that it’s about time given that I submitted a complaint to the CMA over a year ago. The success of the online estate agency sector to date has been based on its consumer-first approach. But since day one OnTheMarket has moved against this consumer and has subjected its member agents and their customers to a dated, anti-consumer way approach that narrows choice.”
“Many of the founding OTM agents such as Savills, Knight Frank, Strutt and Parker and Douglas and Gordon etc dropped Zoopla in favour of OnTheMarket and all sat together as board members of OTM in doing so,” added Quirk. “How will they defend themselves now and say ‘we didn’t discuss dropping Zoopla together?”
Estate Agent Today, meanwhile, claims that it has seen “leaked emails dating from 2013”, which “appear to show a number of estate agencies discussing when they could leave Zoopla and join what was then referred to as ‘an alternative portal’.”
Knight Frank representatives dismissed any such suggestions of unfair practice: “Our various commercial negotiations with Zoopla all took place well before the start of the OnTheMarket portal. We have at all times acted completely independently of other agencies in the choosing of our second portal.”
Chestertons also told Estate Agent Today: “Our portal choices are made wholly independently, something that was clearly demonstrated in January last year when Chestertons chose to remain with Zoopla due to its then-position as a strong London-centric portal, while many of our competitors dropped it. As we anticipated, the property portal landscape changed dramatically over the following months and in September, we made the decision to resume our presence on Rightmove.”
Ian Springett, Chief Executive of Agents’ Mutual, wrote a rebuttal in City AM this week, welcoming the stance of the CMA. “[We have consistently given agents precisely the same advice to make any portal selection decisions independently,” he said.
“The letter from the CMA triggered some predictably opportunistic attacks on us from some who are perhaps sensitive to the impact we are having by injecting competition and increasing choice in a portals market dominated by two big listed companies, Rightmove and Zoopla Property Group.”
“It will clearly take time for OnTheMarket.com to attract as much consumer traffic as the market-leading portals. However, our progress has been rapid: we had over seven million visits in March, and we are greatly encouraged by the feedback we have from agents and consumers alike,” he added.