The Property Ombudsman and the Competition and Markets Authority have prepared a supplementary guidance note to help agents ensure compliance with the Competition Act.
The guidance note also helps agents understand their obligation under TPO’s revised codes of practice, which came into effect on October 1 and have been approved by the Chartered Trading Standards Institute.
“These guidelines come as a result of a well reported case that happened earlier this year where the CMA found that an association of estate agents and a newspaper publisher had entered into an illegal anti-competitive arrangement, breaking the competition. CMA imposed penalties of over £735,000” says outgoing Ombudsman Christopher Hamer.
TPO warns that non-compliance with the practice may not only result in sanctions from the CMA but could also mean possible exclusion from membership of TPO once reviewed through its disciplinary and standards committee.
The CMA’s senior director of antitrust enforcement, Ann Pope, says it is obvious that some agents are still unclear how competition law applies to their business - hence the need for additional guidance.
“In particular, we wanted to highlight that the ability of agents to advertise their fees or discounts freely plays an important role in stimulating price competition between competitors. If agents are prevented from advertising their fees or discounts in the media, fee levels may be artificially inflated and owners are likely to find it harder to assess which agents offer the best value for money” she says.
“It could also make it harder for new entrants to enter the market and compete effectively with established agents. Agents that continue to restrict their advertising of fees or discounts in this way are breaking the law and may face severe consequences” warns Pope.