The National Trading Standards Estate Agency Team (NTSEAT) is to meet with the Competition and Markets Authority (CMA) to discuss complaints that OnTheMarket is acting as a cartel.
In an email shown to Estate Agent Today by an agent who previously made a complaint against OTM, a spokesperson for NTSEAT has confirmed that a meeting would be taking place ‘soon’ to discuss cartel complaints made against the portal.
Complaints made against Agents’ Mutual’s portal focus on its controversial ‘one other portal rule’ and its decision to ban online agents from advertising on the site.
A publicised complaint, made by eMoov’s Russell Quirk last year, challenged OTM’s ban of online agents, which Quirk said at the time works to the detriment of consumers.
Quirk also claimed that OTM was working as an illegal cartel being run by ten estate agency directors to form a protective entity.
The complaint was made in October 2014 and as yet no action has been taken.
A statement was posted on the Agents’ Mutual website in November which said that the organisation had already taken legal advice to ratify its model and contractual terms.
“In the light of the advice received, the directors are satisfied that the company is operating within the law,” it said.
This information takes on greater significance after the CMA published an open letter to the property industry yesterday.
As well as warning agents that agreeing with competitors to restrict the advertising of fees is likely to be unlawful, the letter also highlights that trade associations can break competition law.
“Where they [trade associations] take actions that limit the commercial freedom of their members, for example by restricting the form or content of their advertising, this can risk breaking competition law,” the letter states.
“The association, as well as its members, can be fined for breaking competition law, and members cannot avoid liability by hiding behind the association."
In its announcement yesterday the CMA also confirmed that it has sent letters to several agents warning them that they may be at risk of breaking competition law.
The CMA recently fined an association of Home Counties estate agents, three of its members and a newspaper publisher over £700,000 for restricting the advertising of fees or discounts in a local newspaper.
In light of this case, the CMA says it has sent the warning letters to a number of estate and lettings agents that it has reasonable grounds for suspecting have been involved in anti-competitive agreements to restrict the advertising of fees.
Within its open letter and its official press release, the CMA stresses that businesses that are found to have broken competition law can be fined up to 10% of their annual worldwide turnover, and company directors can be disqualified for up to 15 years.
The letter informs agents that if they think they have been involved in a cartel or unlawful activity, they may benefit from lenient treatment by coming forward to the CMA.
The CMA says it is working with several industry bodies, including the National Association of Estate Agents and the Property Ombudsman, to help publicise the lessons to be learned from the aforementioned case and encourage best practice.
Ann Pope, CMA acting executive director of enforcement, commented: “The CMA is keen to work with businesses across the property and newspaper publishing industries to explain the implications of this case and ensure they understand what they need to do to comply with competition law and can recognise where they may be at risk of breaking it.”
The CMA has also published guidance for agents and trade associations on how to identify if they are breaking competition law.