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.”