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.
Thank you.
Yours sincerely,
Ns Suthakaran
Manager Director
Karan Fossils
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I can't believe that the agents who joined are only just waking up to this all.. it was clear to me from the outset it was wrong and anti competitive and I steered well clear.. yes I am feeling *smug* but sorry for all those who were somehow mislead
Like you Claire we also saw the writing on the wall from the outset, and yes I am feeling very smug as they say there's no fool like an agency fool.
The irony is that OTM is designed to increase competition between the duopoly of Rightmove & Zoopla by endeavouring to make them cheaper to use, ideally now but more importantly in the future. Its unfortunate that the CMA is taking an anti competition attitude towards something that is designed to improve competition!
Micheal, this is just the spin the "news outlet" is putting on it. All the CMA is doing is stating law. At no point do they say they are taking action against OTM. it is just scaremongering by certain individuals. Look at the people involved and what they stand to win from this.
It's a good thing the CMA are stepping in Michael.
AM and OTM are separate operatives in Companies House. as such their agreements to restrain agents need removing, or AM/OTM needs removing.
From the above the agent, his staff and consumers will have suffered. Why should he have to stay there when so many are suffering just because a couple of companies have tried to tie him in.
No - its a good thing that the CMA can step in and stop those who restrain our industry.
The law clearly states that the anti-competitive rules that OTM sign up to are legal for an initial period of time. This is to allow new entrants to any industry or business where there is a near monopoly. Otherwise virtually nobody would want or be able to start up in such a powerfully controlled situation. This is exactly where OTM is with Rightmove and Zoopla. The CMA have not gone against this. They have simply told agents that they must not form groupings/cartels to disadvantage Zoopla or Rightmove by agreeing together to leave either of them.
I find it incredible how our industry is hell bent on self-imploding. From cutting commissions to the raw, carrying out free "probate" and "matrimonial" valuations where the vendor/solicitor is just looking for comparables, offering no-term contracts and generally smiling and saying "come and take me for a ride", we are our own worst enemies. It's about time we took a good look at other English law practicising countries (which is just under one quarter of first world countries and I include the USA here) and learn from them.
If we walk away from OTM there will not be another chance in a generation to break the duopoly and, hang on, don't we now have 3 property portals rather than 2? OTM HAS broken the duopoly. It's still early days so let's hang in there.
Richard - your right there are better property industries out there. The US part self regulates due to its B2B structure, where bad and cheap fee agents become embargo-ed on a one to one basis.
A N Other portal to create a third was the wrong call as it simply replicates the du problem to a trio problem.
The Yank B2B opens up stock and outlets agent to agent. As such Zillow and Trulia are free as the real value is in your neighbouring agent having stock and applicants to bring to his neighbours table.
Well said Richard - the one other portal rule is there while OTM is not directly competing with Z and RM.
They should rename this farce the from the 'portal wars' to the 'open letter wars' - why does everyone feel the need to write an 'open letter' these days?
Its not Scaremongering Smile other than AM/OTM sending out scare letters to agents who want to quit what isn't working and failing to reach what was promised.
The CMA for sure have made it clear that they have arrived on the scene, which takes a lot. So in their lawful eyes, they are now looking close.
Trevor show me where they are saying they are taking action against agents?
Also as for OTM all they are doing is holding agents to a contract. If one of your members did not pay their fees would you say not to worry about it or would you look to take them to court? If this news site had an advertiser that did not pay their bill would they not take them to court? If Iain White provided a consultancy for a firm and they did not pay him would he not take them to court.
You are fighting a losing battle Trevor and stinking of desperation. Every month goes by OTM adds more and more agents. Getting more and more stock and its starting to worry you and others as you will lose out so now you are doing your best to spin the situation. Problem is Alastair Campbell could not spin this for you!
Smile - It's been well reported that AM have been writing to agents.
At INEA we have seen emails from AM staff saying agents had to leave us. Fortunately several just stuck two fingers up at the AM admin staff. At that point we passed emails to the CMA and trading Standards under anti-competitive behaviour.
I'd say there isn't a stinking battle. Thunderbirds, Airforce one, No, the CMA have now made it clear that they have stepped in. At this point many more will contact them and they'll gather findings.
AM gaining more stock is fine. Shame few will see it.
Im for better fair play agency. Not cartel like restraints that hinder good agents or consumers or go against UK and EU gov directives.
Am I being naïve here, surely if agents had a choice of using all three portals I for one would be happy to subscribe to all three, OTM would then have a stronger business by more agents joining and more property advertised, the general public would be more aware as more agents promoted OTM with a bigger market share the other two would be less reluctant to increase costs as OTM agents would actually have a more beneficial presence thus challenging the Duopoly from a position of strength with members that actually believe in the product as opposed to those that took the decision not to join counting their blessings looking at the debacle that is currently going on.
This does our industry no service at all.
Why do people want OTM to drop the one-other-portal rule? This goes agauinst the very essence of why OTM was formed as its sole aim was to reduce the marketing spend for agents. By drop this, it does the opposite and only goes to further increase agent spend. Again- portals do not create leads they funnel them- being with 20 portals doesnt mean x20 leads. Very strange indeed!
Also, limited sympathy, as agents chose OTM not to provide better marketing for their clients but to drive down their own marketing costs, boosting profit. Hakf of the agents that joined could have made that saving through a cut-back in other poor ROI advertising such as print media.
Kristjan, unfortunately, imposing their own rules is anti-competitive and consumers caught into business restraints is unhealthy for Joe Public.
In N Ireland I hear that OTM and AM have introduced a higher per office cost model than Property Pal. Property pal in N Ireland is bigger out there than RM or Z.
So its odd AM/OTM even went there to upset a lower agent pricing model. This out there can only drive prices to agents up.
Could AM/OTM intend to increase pricing here one day above RM and Z??
Equally AM/OTM have tried to make agents boycott other digita platforms that are not totally portals that doesn't go well with Gov wants to see new internet agency models to benefit agents and consumers.
In my opinion all that OTM have done is made Rightmove stronger.
We decided to stay as we were, advertising on all the main portals as we did not think that dropping the second largest portal in the UK and the only Scottish based portal did not serve our clients fully.
Now we are in a position where we are held to ransom even more because RM has even more clout.
For goodness sake give it a rest! What must the general public think of a 'profession' that carps on in this manner about itself every day. MD's and Principals made a decision and it it up to them to remain or leave and take the consequences (if any) and get on with their business. Trevor Mealham - what gives you the right to constantly lecture?
It's a view Ray, the same as everyone else has a right to.
I speak with many many agents. I help many agents. I have a different next gen tech that links agents in a different to de facto way. Ive also been active in consultations on res sales matters and have had some advisories adopted in to official guidance.
My experience and findings are currently supporting some agents who feel they have somewhere to go without having to be seen or heard.
Of course they do have the right- but they don't constantly use it.
You know, I really dont get agents some / a-lot-of the time! We all moaned about the duopoly that ZooplaMove enjoyed. We moaned about the increase in prices. We moaned about the lack of choice.
OTM then arrived. A portal owned by agents with the express aim of disrupting the duopoly and bringing our costs down. Did we agents embrace this? No we MOANED.
I admire OTM's aims and remain in support of it as a portal. I hope it will continue to gain momentum and market share. Clearly neither of these things would happen overnight but give it time and it should/could continue to grow.
Just my thoughts based on 20+ years as an agency owner in one of London's most demanding marketplaces. Give it a chance guys, the constant whinging is a little pathetic. If you don't get it or want to support it, thats fine but the constant negativity feels a little playground-like....
Spencer, Their business model was flawed from the beginning. They promised the earth for only £200 a month less that Zoopla. the board of OTM had enough experience to know that it takes a least 3 to 5 years to build and online portal and public perception of that portal. We are not moaning, we are stating facts. I have nothing to moan about, I didn't touch OTM with a barge pole! Simples
Ray, Unfortunately for non Trev fans or even Trev haters. I speak to many agents and property bods who don't always feel happy or secure to come forward in public domain. As such this messenger (and at times my own views) all have a right to be heard.
If some didn't feel threatened more other voices would come forward, both small and some bigger industry players.
Simply, I can see from the above comments that the agents moving to OTM and dropping Zoopla are trying to justify what they all know, at the time, was morally wrong! We were invited, as a company, by other agents and OTM representative to a meeting, where OTM agents attempted to persuade us to move to OTM as a group!
I had numerous calls from OTM representatives inviting me to other similar meetings, which I refused. One meeting was enough to make me realise that trying to destroy Zoopla was morally and professionally wrong and now it would appear to be legally wrong too! How many of the OTM agents who attended these meetings own up to it, I wonder! And how many have jumped ship and are back with Zoopla? Most in Exeter! I was talked down to by these OTM member agents( I wont name the companies) and told my opinion didn't matter as I was a small independent - well perhaps they shouldn't shout down the so called little man!
If AM are writing to their member agents are they telling them to keep their mouths shut about these numerous meetings that occurred, I wonder? Isn't honesty the best policy?
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