A London agent says he has quit OnTheMarket and Agents’ Mutual as a result of the intervention of the Competitions and Markets Authority.
Ns Suthakaran, the manager director of Karan Fossils agency in Acton, west London has written an open letter addressed to OnTheMarket chief executive Ian Springett; it is in response to a letter from Springett to OTM members on April 21, following the Competition and Market Authority intervention.
The CMA - which itself wrote an open letter last week - was making it clear to agents across the UK that they should not collude in their choice of portal to use or drop to abide by the OnTheMarket ‘one other portal only’ rule.
Suthkaran’s communication is not the first open letter to express dissatisfaction with OnTheMarket; there were some last year when some agents first sought to extricate themselves from the portal.
A spokesperson for OnTheMarket this morning said: "We note this agent's decision to publish an open letter at this time. It is also of note that this agent's properties have not been displayed at OnTheMarket since December 2015, when it was evident that they were being advertised on more than one other portal. We do not believe it would be appropriate to comment further via the media on our contractual arrangements with this agent."
Here is the full text of Suthakaran’s letter:
OPEN LETTER GIVING NOTICE TO QUIT FOLLOWING THE CMA LETTER WITH IMMEDIATE EFFECT
Thank you for your letter dated 21st April. I do not agree that Agents Mutual has given consistent advice.
Your letter states that Agents' Mutual has been building a pro-competitive business. As such to join I and other estate agency business owners had to abide by your rules to:
1. drop various main stream portals (anti-competitive)
2. join a movement that banned online only agents which we now feel is anti-competitive.
By attending your meetings and agreeing with other agents to abide by your anti-competitive rules, in view of the CMA letter (21st April, 2016) the CMA strongly state that agents colluding could break competition law.
WITH THIS I MUST CEASE WITH IMMEDIATE EFFECT ANY FURTHER SUPPORT OF AGENTS MUTUAL AND ONTHEMARKET
The CMA state: Competition law tackles agreements, arrangements or conduct that weaken competition or aim to do so. Effective competition benefits consumers and businesses through downward pressures on price and through spurs to increased quality, innovation and efficiency. Where estate agents enter into agreements or arrangements that restrict competition between them, this can lead to artificially inflated prices, reduced service quality and innovation and limited consumer choice.
* Our business has suffered:
1. in turnover and due to trade loss
2. I have lost members of staff where Agents Mutual and On The Market have failed for us.
3. We were led to believe by you that OnTheMarket would rank above Zoopla come 12 months, which failed to happen.
We supported OnTheMarket but the now CMA intervention, loss of trade, fall in revenue due to pulling off other main portals means that we feel Agents Mutual is now wrong for us, my staff and most importantly our customers who rely on us to do a job that Agents Mutual and OnTheMarket are restricting us from doing in an open trade situation.
Obviously the CMA letter highlights anti-competitive behaviour as towards agents colluding over dropping portals which we have HAD to do under your rules. As such you and your board have compromised us and thousands of agents by insisting that portals HAD to be dropped.
The CMA make clear: Estate agents that are found to have breached competition law can be fined up to 10% of their annual worldwide turnover, and directors of such companies can be disqualified from UK company directorships for up to 15 years where their conduct in relation to such a breach makes them unfit to be concerned in the management of a company. In addition, individuals involved in certain very serious cartel activity, such as agreements between estate agents to fix prices or allocate markets, may be prosecuted under the criminal cartel offence and, if convicted, could go to prison for up to five years and/or have to pay an unlimited fine.
Please can you let me know what indemnities are in place to protect your subscribers, should fines and sentences kick in.
With the above please take all our listings off with immediate effect and treat our agreement as void..
Agents Mutual rules are one thing. UK law is what counts. The CMA letter has made us see that Agents Mutual and OnTheMarket appears to be encouraging anti-competitive CARTEL arrangements which we wish to have nothing whatsoever to do with.