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Agent asks: will CMA 'cartel' verdict hit OTMThe boss of eMoov says he believes last week's hefty fines imposed on three estate agencies by the Competitions and Markets Authority could set a principle which would apply also to agents behind OnTheMarket.

The CMA last week levied £775,000 in fines on Three Counties Estate Agents Ltd and publisher Trinity Mirror (Southern) in a case first reported last year on Estate Agent Today.

The offence by the three agents in TCEA Ltd - Waterfords (Estate Agents) Limited, Castles Property Services Ltd and Hamptons International - was to collude, cartel-style, to prevent the advertising of agents' fees in the Surrey and Hants Star Courier for up to nine years.

Now Russell Quirk - chief executive of eMoov, which has an outstanding complaint against OnTheMarket lodged with the Competitions and Markets Authority - says OTM is guilty of anti-competitive behaviour in banning online estate agents from its pages and imposing the one portal rule' on all its advertisers.

The CMA says it is still considering Quirk's submission.

He says the most interesting aspect of the CMA judgement last week was that its fines appear to have been decided on the basis of their company turnovers.

Castles has agreed to pay the CMA £19,275, reduced by 10 per cent under technical terms so making it £17,348. Waterfords has agreed to pay £51,693, reduced to £46,524.

Hamptons International has agreed to pay £690,317, also reduced by 10 per cent to £621,285. As the ultimate parent companies of Hamptons International, Countrywide plc and Countrywide Group plc have agreed that they are jointly and severally liable for a payment of £372,771.

Trinity Mirror Southern is paying £101,397, reduced to £91,257.

You'll notice that Hamptons paid by far the most. This, it seems, is likely due to the size of its Countrywide owner in revenue terms says Quirk.

So, fast forward a few months and imagine that the CMA finds that OnTheMarket is guilty of anti-competitive behaviour in banning online estate agents from its pages and imposing the one portal rule' on all its advertisers. It's evident that OTM themselves could then be in for a fine of something to a maximum of £2.3m at 10 per cent of what I've estimated to be its first year revenues claims Quirk.

He says that, if the same principle applies, even higher fines could be imposed on those agents who founded Agents' Mutual and established the online agency ban and the one other portal' rule.

In Savills' case that's a potential fine of £107m and Knight Frank £39m. Even the smaller Douglas and Gordon would see its profits wiped out with a charge of up to £2m Quirk claims.

He concludes by saying: I've calculated that the possible total fine that could be sought if the parties involved are proven as wanting as far as the Chapter One Competition Act provisions are concerned, is a whopping £177m.

Last night OnTheMarket's chief executive Ian Springett told Estate Agent Today that Quirk's speculative comments were noted and that OTM's would reiterate the statement it made last November.

That statement reads: "From recent public comment, we understand that a complaint may have been made with the Competition and Markets Authority, alleging that aspects of Agents' Mutual's agreements with its members are anti-competitive and illegal.

"At the outset, Agents' Mutual took appropriate legal advice as to the legality of its model and contractual terms. In the light of the advice received, the directors are satisfied that the Company is operating within the law."

Comments

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    Oops, I think you may be right, thank PeeBee and apologies PP

    • 28 March 2015 12:24 PM
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    Mr Shinerock - unless I am mistaken, your post reads as if the above poster is referring to you.

    I think you'll find he/she is referring to the subject of the article.

    If I misread you then I apologise.

    • 28 March 2015 08:59 AM
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    One of the enduring characteristics of posts like yours is their stuborn avoidance of the facts and inability to hold or carry a logical arguement. Just remember this, for every agent that has joined OTM two have not and those two tend to be more silent than the one who has. You may believe what you like about me but I am in touch with how some smart influential agents really feel about OTM and in the main they mainly agree with me.

    • 28 March 2015 08:19 AM
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    Awww... that's a bit harsh, Property Pundit.

    In his own head he's an "irrelevant SOMEBODY"... ;o)

    • 26 March 2015 11:00 AM
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    Nonsense from an irrelevant nobody.

    • 26 March 2015 10:54 AM
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    "I think you need to re-examine your view of the world, it's a subtle place with many shades of grey..."

    Sorry, Mr Shinerock - but NEVER in your multitude of posts here or on PropertyIndustryEye have you so much as acknowledged the existence of a single shade of anything other than Shinerock.

    You can't change your spots now - they are indelibly printed on the internet...

    • 25 March 2015 07:32 AM
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    It's pure semantics and I think you just have a point to prove for reasons I am not prive to. I am de facto an estate agent just like you but that doesn't mean that's all I am or its how define myself. Can you swim If so that makes you a swimmer but if you were asked to describe yourself you wouldn't say ' I'm a swimmer' would you I think you need to re-examine your view of the world, it's a subtle place with many shades of grey, that's part of the mystery and the challenge.

    • 24 March 2015 20:30 PM
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    Simon Shinerock said in the comments section on EYE last year...."i'm an estate agent like you".

    • 24 March 2015 09:41 AM
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    I have never seen myself as an 'Estate Agent' or any other label, I came into estate agency over 25 years ago and my true motive then was to be successful according to my own standards, I feel the same today. I find it sad that you need to caricature yourself in this way and are motivated by such negativity, try and think positively, see the bright side and I promise you will feel better about yourself

    • 24 March 2015 07:31 AM
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    "The second is that there is a growing realisation that there is a need for a UK wide sales and lettings service"And there it is....Simon Shinerocks true motives and even more proof that you gave up being an real estate agent a long time ago, if ever you was one.

    • 23 March 2015 19:20 PM
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    Not really Ray, actually I'm relatively bored with OTM but can't help taking an interest as the the slow game develops. Nowadays OTM has been eclipsed by two issues for me, the first is the ever growing threat to the PRS and my efforts to do something to protect it, watch this space for a survey aimed at countering the miss-information disseminated by the likes of Shelter and others. OTM RM and Z won't have much of a business and neither will I if the PRS is destroyed by short term political vote chasing. The second is a growing realiseation that there is a market for a specialist UK wide sales and Lettings service, this latter interest may affect my growth plans for Choices and I suppose reinforces my antipathy towards OTM. I think my track record speaks for itself, I feel like a bit of an underachiever really but as they say, it's not over until the fat lady sings :)

    • 23 March 2015 19:09 PM
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    Rob Davies - is that COUNCILLOR Russell Quirk you are referring to by any miracle of chance ;o)

    • 23 March 2015 18:58 PM
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    @Simon Shinerock

    A nerve touched
    It seems you ask your own questions and then provide your own answers...
    I agree to differ with you.

    • 23 March 2015 18:39 PM
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    Quirk should go into politics, he'd be right at home there. He's fantastic at spouting meaningless soundbites and having childish digs at his rivals.

    • 23 March 2015 15:04 PM
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    Well, online estate agents are generally much cheaper, so I'd say it's more a matter of fact than opinion.

    You can argue till the cows come home about whether what online agents offer represents good value for money - you clearly think not, in some respects I'd be inclined to agree - but that's their whole sales pitch, the cheaper fees. Without that, they don't have much.

    • 23 March 2015 15:01 PM
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    Something funny

    • 23 March 2015 14:59 PM
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    Ray, if the NAEA decides to create a portal for members that's fine, ony members can join. If they establish unfair membership criteria then they can't be a professional body. The law society is open to all who pass their tests, all of which gave to be fair. The reason why I take the stance I do us purely down to the way I see the players and in my book two wrongs don't make a right. I have a huge aversion to establishment cronyism, I deeply suspect the motives of those behind OTM and I like the idea of the free market because it's usually where I do best. We want to encourage creativity, talent, change, it's what life is about, not digging in your heels and trying to cling on to something whose time is passing. If High St Agency is to remain fit for purpose it should be allowed to compete and evolve without resorting to crass protectionism with whatever lame excuse

    • 23 March 2015 13:42 PM
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    @Simon Shinerock

    Is the Law Society open to all irrespective if they are or are not proper qualified solicitors I think this could be the path that OTM is taking.
    I believe you are involved in advertising therefore I understand the stance you take because you want as much input as possible with no restrictions

    • 23 March 2015 12:59 PM
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    Hahahahahahhaahhahahahahahhahahahahahahahahahhahahahahahahahahhahahahahahahahahahhahahahahahahahahahhahaa :D

    • 23 March 2015 12:50 PM
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    Ray, there is a risk associated with doing or not doing anything. In a way it's a shame the law can't be simpler on this subject, instinctively we feel the difference between right and wrong should be black and white. The trouble is that we all want to gain an advantage over the rest and sometimes we see getting together in groups as the way to do that. Clearly a club has to be able to determine who can join, within reason but they can't say no blacks or no Jews because this is quite rightly illegal. A club is not serving the public though and professional bodies have to be open to all, so the question remains as the what OTM actually is. To me it doesnt feel right and irrespective of the legality I think such behaviour is suspect. It's not nice to be excluded just because the establishment doesn't want to compete with you and where such mechanisms succeed they are bad for everyone except the membership. Time will tell but I think this case is a portent that should not be so easily dismissed.

    • 23 March 2015 12:44 PM
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    H Paul, iProperty I believe is completely different. They not telling there clients what they can and can not do, just who they are willing themselves to advertise on there site. There clients would still be able to market with whom they wish.

    • 23 March 2015 12:07 PM
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    Many professions have restrictions on membership.
    Seems this is comparing chalk with cheese
    Anyway, an agent can choose whether or not to go with OTM or not and as long as they show which portals they are using what is the problem
    Some of these 'carpers' should get back into their boxes and concentrate on their own business!

    • 23 March 2015 11:00 AM
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    Mark and Real Agent, I fear you have both missed the point, Mark you completely and Real Agent, almost there. It's not about online or high street, or about cost savings either. There is no inherent value in the high street per se, it's good for some, not for others. The real point is providing added value, having a stronger proposition than your competition. This may be your knowledge, reputation, marketing, negotiating or selling skills, it could be something unique. The big advantage of a national or worldwide market is that their size allows an unviable local niche to become a huge business. So online agents would do well to differentiate themselves from their bretheren, otherwise the rush to online is merely a gold rush and in a gold rush the people who make the most mondy supply the picks and shovels.

    • 23 March 2015 10:29 AM
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    Or not enough people heard me sing Karaoke so I'm going to sing again......

    • 23 March 2015 10:28 AM
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    Say it often burn it in :)

    • 23 March 2015 10:20 AM
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    I love comments like this, please define saving money Mark! I would consider it the net result that a seller got wouldn't that be fair to sayn Given you are unable to demonstrate that a agent more local, with better local market knowledge and contacts couldn't have got more for a property, I would say your "saving money, no brainer" scenario is a matter of opinion isn't it!

    • 23 March 2015 09:56 AM
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    He does have an awful lot to say for himself. His constant sniping at various competitors is tiresome in the extreme.

    • 23 March 2015 09:55 AM
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    Russell, where have you been We haven't heard your opinion on nearly everything property-related in quite a while. I was getting worried. Back on form now, though.

    • 23 March 2015 09:54 AM
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    Seriously this again Simon! Do you have this post copied and ready to paste!!!!

    • 23 March 2015 09:48 AM
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    OTM seems to be trying to encourage existing established estate agents to advertise with them solely.

    The new online estate agent does indeed save home owners money on commission. Maybe the online agent is a way to to claw back more of the house sale proceeds for owners who have small amount of equity in property.

    With agent fees up at 1 to 2% on an average property of say 350k the conveyancing & advertising packages available at say 699 are very attractive to a lot of home owners.

    This business model has shaken up the industry and put the scare tactics on established agents with standard fees ranging from 1 to 2% do the maths pay 699 of 5 - 6K in fees

    We are all looking for ways to save money and the eventual property sale will always have a hefty commission bill.... or not No brainer really when it is time to sell our property

    This is a true reflection throughout the country in the lower value property and has literally demonstrated the revenue to be lost by the high street agents who are flapping about turnover due to the little guy finding a niche and in some cases making it work for him. Lets look in 5 years time and see how many home owners are using listing only fee websites. The portals dominate whatever you need Estate agent, plumber, plane or a hotel.

    • 23 March 2015 09:41 AM
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    If Quirk's product is so good...as he makes out.....why does he spend so much time deriding his competition. Agents don't sell properties consumers buy them...let them decide which is best.

    • 23 March 2015 09:37 AM
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    Back in 1989 when I founded Choices, shortly after a group of local agents got together with trinity mirror to exclude us from the local property paper. I contacted the then equivalent of the CMA and based on a letter they sent me explaining an illegal restriction I was able persuade trinity to allow us back in. The key point was that there was collusion between the provider, trinity, and the customers, the local agents. So, given the competition laws have got far tougher since then, how might this apply to OTM. Well, in order for it to be the same you would have to show that both OTM and their customers were involved in, for example excluding online agents. Of course this is made more complicated because the agents and OTM started together. If for example a group of agents went to RM and said 'we will only continue to advertise with you if you exclude online agents' and RM were to agree, then this would, in my view, clearly be an illegal restriction. However, in this case a group of agents have got together and decided to start a portal that specifically excludes Online agents as well as imposing other restrictions on members. The members who join are not colluding, they are merely agreeing to the rules. So, the question is less straightforward, clearly there appears to have been anti competitive collusion at the outset because the founding agents imposed these rules. If this is so then on the face of it the founders could have broken the anti- competition laws and if this is so may be penalised. As far as the members are concerned, it would seem to me that if the organisation is trading on an unfair and illegal basis then the members may also be liable. From my experience I have learned that if it looks like a duck, it waddles and quacks, then it's probably a duck, whatever else it claims to be.

    • 23 March 2015 09:32 AM
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    The company is operating within the law. Are its members

    • 23 March 2015 07:33 AM
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    I understand that there is a new portal called Iproperty that will only allow new homes builders and private sellers to list, this appears quite regressive to me, will these private home sellers also be fined 10% of their annual salary

    • 23 March 2015 07:16 AM
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    Clutching at straws.

    'You can only advertise if you agree not to state your fees or a discount' is not the same as 'you can only advertise if you have a shop front'.

    • 23 March 2015 06:44 AM
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