The Competitions and Markets Authority is probing three estate agents for allegedly breaching competition law by agreeing to prevent estate and lettings agents from advertising their fees or discounts in the local property newspaper.
The agents are Waterfords (Estate Agents) Limited, Castles Property Services Limited and Hamptons International, which are members of the Three Counties Estate Agents Association.
The CMA's claim states that these companies entered into an agreement which prevented members of the association (including themselves) from advertising their fees or discounts in the local newspaper, the Surrey & Hants Star Courier. Waterfords and Hamptons International extended the scope of this arrangement, with the cooperation of Trinity Mirror Southern Limited, the publisher of the Surrey & Hants Star Courier, to prevent any agents (whether members or non-members of the association) from advertising their fees or discounts in this newspaper.
The CMA says its provisional view is that the arrangements reduced the competitive pressure on estate and lettings agents' fees in the local area.
In addition, the authority claims the alleged restrictions made it harder for potential competitors to enter the market by using the level of their fees to attract new customers.
A statement says the CMA provisionally considers that these practices limited consumers' choice and obstructed their ability to compare prices and assess value for money.
The ability of a company to advertise its fees or discounts freely plays an important role in stimulating price competition between competitors. If estate or lettings agents are prevented from advertising their fees or discounts in the local newspaper, property owners are likely to find it harder to assess which agents offer the best value for money says Ann Pope, CMA senior director of antitrust enforcement.
It could also make it harder for new entrants to enter the market and compete effectively with established estate and lettings agents.
The CMA says its findings are provisional and no assumption should be made at this stage that there has been a breach of competition law.