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.
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This is ridiculous. Yes they may have said that they are meeting but to me they are just going through the motions. If people keep making complaints they have to make it seem like they are taking them seriously. The section of the letter about trade associations is just protocol - it's official wording which has probably been on the CMA website for months. They are just publicising it to make it seem like they are interested. They got their big scalp recently - and to me this is more about them going after agents and their newspaper advertising than any portal.
Tut-tut. There could be trouble ahead for OTM.
Yes, OTM have been acting as a cartel. I thought this was common knowledge.
I'm no member of OTM so I would say I don't have a vested interest. Some people may think it is a cartel and that's fine. But don't tell me RQ complained for the good of the industry over some more 'disruptive PR'. The fact is that every one of the 5,000 agents that signed up to OTM knew exactly what they were signing up for - they knew about the one other portal rule and they knew that online agents would be banned. So although OTM maybe 'restricting' the advertising - if the agent has consciously signed up for that how can there be an issue here? As is alluded to above, if the CMA have received complaints - which I'm sure there have been plenty more than we have heard about - then they have to at least acknowledge them. If they have received more than one complaint that OTM is a cartel then they have to speak about it with the relevant parties - that's all that is happening here.
Finally, John, some sense. This is being blown out of all proportion by people with vested interest and those who passionately oppose OTM. Mountain out of a molehill as they say.
When did we lose our sense of perspective!?
@FakeAgent - do you really believe the drivel you write?
There is a lot of tosh spouted in the comments section by some. The CMA has sent several letters to agents warning them they may be at risk of breaching competition law. This isn't just an OTM issue, although that's how some people are deliberately perceiving it. And it says 'may'. May! There is no definite answer, no evidence that OTM have done anything wrong.
Innocent until proven guilty? Or do we not abide by that anymore?
The anti-OTM brigade are getting very excited because they see this as an affirmation of their beliefs. But they're seriously jumping the gun.
This could end badly for OTM. The one other portal rule was such a clumsy, ill-thought out move.
I'm not on OTM and have no particular love for them, but I can't understand the cartel allegations. Members know what they're getting into when they sign up, they know about the one other portal rule and the ban on online agents. No-one is forcing these agents to sign up, are they? You could argue the one other portal rule discourages competition, but only once people have joined. And even then, there is no obligation to be on OTM. You could remain on RM and Zoopla or the other smaller portals out there.
I can't really see how they're restricting competition. I can understand Mr Quirk's grievances, but because online agents aren't allowed on OTM doesn't mean they're not allowed on other portals. If OTM was monopolising the market, then the anti-competition rhetoric might carry some weight. As it is, I just don't see it.
Tim, I suggest you read my article in 'Views' I have a feeling it will change your perspective, as will the very pertinent comment and opinion given by the Partner of a leading National Law firm.
My knowledge of OTM is quite limited - other than the adverts I've seen and the articles I've read - but I find it fascinating to see how much it divides people in the industry. You're either pro-OTM or anti-OTM. No in-between. It's as tribal as a great football rivalry.
It is ridiculous that there was ever an exclusivity rule in the first place. Removing online agents was a huge mistake, and one which is massively reducing choice for the all-important consumer. OTM clearly couldn't break the duopoly of Rightmove and Zoopla on its own merits and instead have tried to do it via anti-competitive means.
Will this investigation spell the end of OTM though? I highly doubt it, I'm sure they'll manage to squirm out of it through some kind of loophole.
This is all kicking off! The OTM/Zoopla debate really gets the opinions flowing, doesn't it?
It sure does Jamie! Portal drama again! Think we all need to remember this is merely a meeting to discuss complaints. Whether action will be taken is a whole other matter.
No service provider to agents should restrain law as set down by BIS, OFT/CMA, Treasury/HMRC and other government bodies.
The recent CMA Trinity + agents cartel case contained less restraints by just a few agents. OTM now has solid rules that have been enforced on willing agent practitioners + larger group MD's insisting managers and negs abide by the one portal rule. As such a manager or neg who feels their bosses rules are not in client best interest may individually being forced to also breach the 1979 Estate Agents Act.
Depending on findings, individual agents under OTM engaging agency brands may have ethics questioned??
The collective banning online only models was ill thought out. The OFT wanted CPRs and BPRs to open the web to new agency models. Not for commercial media operatives to take things backwards. Alike OTM having it's commercial trade rules, OTM as a UK operative comes under UK CMA, BIS and Trading Standards regulation and policing.
Why should a commercial concern restrain agents under their own rules when UK law is very clear. AM really just ploughed in and if the CMA finding are that they were wrong, then alike the recent £735k cartel fines will have to accept penalties, changes or worse.
For sure CMA will ask what effects has OTM's restraints had on consumer best interest and (BPRs) to other operative agency models in the industry. Has OTM restraints banned lawful other models - YES.
Again - one surveyor commented to me earlier that he felt one large portal had a ban on agents showing their fees.
Maybe this brings call for the need for CMA to make BPRs (business protection regulation) also mean that agency service providers MUST NOT impose rules and regs that defy what government has laid down clear for all in the industry to follow.
Interesting.
Cartel rules do say:
LENIENCY FOR BUSINESSES
A business which has participated in a cartel may receive total or partial immunity from fines if it comes forward with information about the cartel, provided certain conditions for leniency are met.
THE LINK IS HERE FOR AGENTS WHO FEEL THEY MAY BE IN A CARTEL AND WISH TO REPORT IT:
https://www.gov.uk/cartels-confess-and-apply-for-leniency
The first cartel member to report and provide evidence of a cartel will be granted total immunity, provided the CMA is not already investigating the cartel
OTM is not restrictive - if you don't want to be with only one portal then stay with RightZoop. The only restrictive practices which should be looked at are Sole Agency. It doesn't exist in most countries of the world, why should it exist here? All this BS about marketing costs is just BS. It simply protects lazy agents from doing their job and makes the housing market sluggish, like the sole agents.
@Hafsid. Sorry your wrong. OTM has all the signs of breaching UK regulations.
Also on sole agency. Most countries real estate allows selling rights. Even in the USA over 1m realtors gain main agent exclusivity on the basis they MLS sub out.
In the event that a agent doesn't deliver key points that formed part of gaining the instruction, consumers can contact Trading Standards to intervene and police foul play.
There is quite a bit of good UK law in CPRs and BPRs and the 1979 Estate Agents Act. Equally likes of OTM must also abide UK real estate law. Its wrong they impose their own rules for self commercial gain in favour of abiding CMA/former OFT guidance.
What a difference a day makes. Yesterday Armageddon for OTM - today the Competition and Markets Authority has confirmed that it will not be pursuing a complaint against OnTheMarket. Do some of you who posted so vociferously yesterday feel just a little bit silly today?
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