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TODAY'S OTHER NEWS

OnTheMarket and CMA: agency director says portal choice was independent

One of the directors of Agents’ Mutual, parent body of portal OnTheMarket, has told Estate Agent Today that his firm does not discuss commercial decisions such as portal choices with competitors and that such decisions “are made wholly independently.”

The comment - from Chestertons chief executive Robert Bartlett - came after the announcement by the Competitions and Markets Authority that it had issued an open letter warning agents about the potential risks, fines and reputational damage involved in any alleged collusion over the choice of portals they advertised on. 

The letter and its accompanying statement - which you can read here - were revealed by the authority yesterday. 

One of the critical parts of the statement reads: “...the Competition and Markets Authority became aware that some estate agents may be making joint decisions to join the OnTheMarket portal and to remove their business from competing portals, rather than reaching these decisions independently of each other. The CMA has also contacted some agents that it suspects may have been directly involved in such activity.”

The CMA is not revealing the number nor the identities of the agencies it has contacted, nor the details of what led it to believe some agents may be making joint decisions on portal choice.

Estate Agent Today contacted the six agencies forming the original board of Agents’ Mutual; Chestertons issued the statement above while a spokeswoman for Savills said there would be no comment “at the moment”; a spokeswoman for Glentree International said the agency’s director, Trevor Abrahmsohn, was in the United States and unable to comment in writing; and a spokeswoman for Strutt & Parker said “we will not be making any official comment.”

There were no responses from the remaining agencies - Knight Frank and the London agency Douglas & Gordon.

The CMA’s letter, from senior antitrust director, Ann Pope, makes it clear that there could be costly consequences for agencies deemed to have acted against competition law. 

“Estate agents found to have breached competition law can be fined up to 10 per cent of their annual worldwide turnover, and directors of infringing companies can be disqualified from UK company directorships for up to 15 years. In addition, individuals involved in certain cartel activity, such as agreements between estate agents to fix prices or allocate markets, may be prosecuted under the criminal cartel offence and could go to prison for up to five years and/or have to pay an unlimited fine” Pope writes.

One of the recent rebel agents - Nick Crayson, whose single-office agency Crayson dropped Rightmove when joining OTM early in 2015 - described the CMA letter as “a bombshell” that might mean the end of the portal.

“As soon as I joined OnTheMarket there was what looked very much like a systematic move by some big corporates to drop Zoopla, with announcements over the course of a few weeks to heighten publicity. [OTM chief executive] Ian Springett started saying he was intending to beat Zoopla to the number two portal spot” according to Crayson.

He says his business suffered as a result of the critical mass of London properties being reduced on Zoopla, obliging him to rejoin Rightmove. He says he may consider seeking compensation for the loss of business if the CMA finds there was a systematic dropping of the Zoopla portal, breaching competition law. 

The CMA statement accompanying its open letter includes a quote from Mark Hayward of the National Association of Estate Agents, who is also a board member of Agents Mutual.

The CMA statement also included a quote from The Property Ombudsman, Katrine Sporle. 

Meanwhile OnTheMarket - which has not been contacted by the CMA about the matter - says of the CMA affair: “The guidance to agents given in the CMA's open letter accords entirely with the advice consistently given over time by OnTheMarket/Agents' Mutual to its current and prospective agents. 

“It has always been clear that in making a choice of 'other competing portal', if any, at the time of joining Agents' Mutual and listing their properties at OnTheMarket, agency firms must act independently. Firms must not enter any collective agreement with other agents either (a) to list only at OnTheMarket to the exclusion of all other property portals or (b) to list on the same "other" portal in addition to OnTheMarket. Such an agreement could constitute a breach of Competition Law.”

  • James Scollard

    It's good the CMA have confirmed they are happy with On The Market which is not surprising given the third portal adds competition to the other two leading portals and gives agents a choice who they advertise with. I expect more agents will want to join on the market given their lower fees and growing market share.

    Terence Dicks

    James, the CMA have confirmed no such thing. If you read the open letter from the CMA, it states "there is no reason to write to OTM at this time". It in no way exonerates Agents Mutual or OTM. Targetting Zoopla may have seemed like a good idea at the time, but it looks like it could now bite them on the behind if collusion is proven. Why would more agents join OTM when they refuse to drop the ridiculous "one other portal" rule. Do you not wish to do the best for your clients?? Are you, like AM just about the cheaper fees for yourself?? There is me thinking that looking after the client's best interest and making money go hand-in-hand.

     
    Trevor Mealham

    It doesn't say that James. The fact that AM and OTM have different directors totally and the fact that the 'one other portal rule' is a colluded consequence.

    Means that agents have been led by a cartel arrangement. To have a cartel needs two separate entities colluding.

    The CMA have studied the situation for a long time. As such I feel serious things will now happen and heads will roll.

    The UK is part of the EU, and EU law is very harsh on anti-competitive arrangements.

    I would think agents would be wise to take legal advice and show their solicitors the CMA letter and think deeply to stay in AM/OTM and support it totally, or to bail out if post legal advice they feel it isn't something they wish to be part of.

     
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    I'm not a fan of OTM but wish it well however, this is pure mischief making by Mr Quirk who seems to have a well-trained pet in Anna White at the Telegraph who seems willing to print what he says without checking her facts first.

    Trevor Mealham

    Not at all Chris.
    Russell has an online only model. Im not a fan of Russell's cheap fee model, BUT nothing in the Estate Agents Act says that Russell can't trade as he does. I believe a traditional approach can achieve better prices. Equally I have seen some reviews that compliment eMoves customer service.

    Were in changing times and future agency will chimera into different models to even today. But anyone who trades as lawfully allowed has to be accepted.

    The AM/OTM stance didn't just hit RM and Z. They blacklisted many including INEA, online only agents, other portals and so on that are all lawfully allowed.

    What isn't allowed is creating an unfair, unlawful platform via collaboration that goes against UK and EU competition and industry laws.

     
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    I'm not sure you've been keeping up James ? Some of their own clients are planning to sue them and the CMA has evidence of collusion . If anyone wants to join ,contact me first . I have an intersting proposition involving a Nigerian prince and his goldmine ....

  • London Agent

    We have always wanted to join OnTheMarket but we are not prepared to 'come off' the other two portals which produce a huge number of leads for us on a daily basis. The broad concept of OTM is good but the execution is poor. We have spoken to many members of OTM, so that we could always 'change horses' if it was in our clients interest - nothing we have seen or heard has convinced us that this is something we should do at the present time.
    We also believe that while in no way wishing to make any accusations or point any fingers, we were advised that because many of the same firms, a number of the same directors and management personnel who were behind PrimeLocation are now behind Agents Mutual and OnTheMarket we should exercise caution.
    I hope this latest news means that we along with a number of other firms will be invited to join OTM and they will get rid of their one other portal rule, given that many of the corporates behind Z and AM will not join OTM, it will only help firms like mine to strengthen our hand in the face of the ever creeping corporate invasion of the High Street of SW London.

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    L.A.

    I thought long and hard about OTM - Is it perfect, No. Do i like what they are trying to achieve, Yes. Do I think they will achieve it, Probably not.

    So for last 18 months i have not signed up. I kept with RM & Z. I did not gain market share, i did not lose it. Agents signing up more importantly did not lose market share.

    The eye opener for me is as long as you are on RM do you even need a second portal?
    I thought we did. I put my hands up now i got it wrong. RM is so well known its the only portal you need.

    Also i started to look at what Z were doing re data, support to online agents and did not like it.

    I decided i did not need or want Z.

    But i liked what OTM were trying. So i took the choice to leave Z and join OTM.

    To put your mind at rest business has been the same, no lash back from public, no lost business, no loss of market share.

    I have a good steady supply of leads from RM and i support OTM hopefully that one day it will grown enough so i no longer need RM. WIN/WIN

     
  • icon

    What is the point of OTM if it does not have a USP?
    Their USP would seem to be an element of 'exclusivity' albeit not total (one other portal).
    Exclusivity can be to the benefit of clients in that there is closer control of the sales process? However, agents would do better to just make up their minds 'to join or not to join' then get on with advising their clients of what they do. Many of the detractors think that selling real property is the same as selling cans of beans

    London Agent

    This hang up with USP! I expect you next to tell me about "the strategic aim is of OTM is to standardise the infrastructures to drive down operating costs through supply based consolidation and leveraging group spend as well as exploiting best-in-class technologies and practices to provide robust, scalable and agile services with excellent customer experience" - most agents do broadly the same thing we sell and let properties. OTM's USP, (you like management speak and gobbledygook so forgive me) is it's agent-owned and if enough people get behind it you never know it could work if agents then think it time to come off Z and RM no doubt they will make their own decisions. The current arrangement will stop this happening.

     
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    Nice copy & paste.

     
  • London Agent

    I thought that people who used management speak did just that. I think it proves my point perfectly - management consultants trawling the web for the latest buzz words and churning they out to try and impress people - when a little research shows what rubbish they are. Sorry you fell for it but that was my point! Management speak and buzzwords used by the likes of the 'dragons' are simply rubbish.

    Genuinely unique things don't need a USP. What possible thing do you offer which is UNIQUE. Don't tell me, but I bet your firm goes that extra mile!

    You might do things differently but that does not make them unique. People who talk about their company's USP are normally only very average businesses trying to define themselves because they are just NOT unique.

    I want OTM to be a success however it needs strong leadership and someone with foresight, not someone looking to produce another PrimeLocation - that ship has sailed and we need to look for something new.

    I look forward to seeing your USP, then we can all copy it, you will then have to look for another - while you do that I'll get on, sell some more properties and let you reinvent the wheel!

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