Yesterday we heard about the letter from the CMA warning agents about anti-competitive behaviour. Today, in a scoop for Estate Agent Today, we find out that Trading Standards is indeed meeting with the CMA to discuss complaints made about OTM.
In their letter under the heading 'Trade Associations', the CMA suggests that a Trade Association may be breaking the law:
'where they take actions that limit the commercial freedom of their members’
It seems likely that this is a direct reference to OTM and that the OTM exclusivity rule may be just such a limit on their members’ commercial freedom.
In light of these revelations, it has to be time OTM faced up to the very real risk they and their members face in the form of large potential fines and possibly worse. They need to try and protect their own and their members interests by dropping the dangerous and anti-competitive exclusivity rule once and for all and hope that is the end of the matter.
Every day the exclusivity rule persists increases the risk of severe fines and penalties being levied against OTM and its members.
On the plus side, dropping the exclusivity rule could actually benefit the OTM proposition and help drive new members. I, for one, would become a member if they do drop it and I'm sure there are many agents out there who, like me, approve of a strong agent-owned portal but have not joined OTM simply because of the exclusivity rule.
I also think that OTM membership should be open to all estate agents, even those without high street offices, so that means Russell Quirk at eMoov for example!
For those who believe that internet based agents can't provide the same quality of service as the high street, the consumer will make the final decision. If OTM can muster enough support to break the duopoly of Rightmove and Zoopla then fine, let them do it on their own merits without having to resort to unfair, anti-competitive means.
Most importantly, however, dropping the exclusivity rule now will minimise the risk of a full-blown CMA investigation and the possible dire consequences this could have for the OTM business and its member agents.
As many of you know, I have campaigned relentlessly against the OTM exclusivity rule from day one. If you want a refresher, take a look at this article I wrote back in October 2014, the third in my 'Industry Quake' series. This one dealt specifically with the issue of the anti-competitive nature of the exclusivity rule. Here are two prescient passages, backed up by research in the article:
'It's worth having a look at how the Agents’ Mutual exclusivity rule might be viewed by the CMA. The reason for the exclusivity rule is to control portal costs and, indirectly, to increase member profits. This could be seen to be at the expense of the consumer, who would suffer as a result of their property receiving less exposure than it would have done if the free market were allowed to operate'.
'I'm hoping I don't have to write another article on this increasingly embarrassing (for the industry) subject, I'm hoping to hear an announcement very soon from Agents Mutual that they are reviewing their position on the exclusivity rule. If I don't hear that announcement then I will continue with my next instalment and believe me, I have plenty of more reasons why AM as currently constituted is a very bad idea'
Take a look at the whole article here.
However, it gives me no pleasure to see how events are now unfolding. What I want to see is a strong, successful industry based on fair and inclusive principles, in which the best agents thrive on merit without the need to unfairly restrict competition.
So we shall see if the board of OTM have the courage and the common sense to announce the end of the exclusivity rule without further delay and in so doing to limit the risk they and their members are already exposed to. The alternative, to carry on with the current strategy, is unthinkable and the consequences potentially catastrophic.
We cannot hold back change, we cannot un-invent the internet, we are part of the free world and we operate in a free market. We are happy to bask in the benefits that freedom brings, so we have to accept the competition that comes with it as well.