It has been revealed this morning that OnTheMarket has been ordered to pay £1m into court - three quarters of it is due today and the rest by the end of August.
The Financial Times this morning says the court case that the funds relate to will be a key test of whether the portal can sustain its ‘one other portal’ rule.
The FT says that Agents’ Mutual, the parent company of OTM, has sued estate agents Gascoigne Halman and Moginie James for damages in the High Court. OTM accuses them of breaking the terms of their agreements by listing properties on more than one other portal.
The agents contend this and the High Court has now referred the case to the Competition Appeal Tribunal, a specialist court for competition disputes.
The tribunal will hold a preliminary meeting, known as a case management conference, on July 26.
The hearing is being held against a backdrop of the Competition and Markets Authority saying in the spring that some agents were suspected of colluding in the process of signing up to OnTheMarket and dropping another portal.
OnTheMarket itself was not accused by the CMA of any wrongdoing.
The FT says that in documents filed at the High Court, Agents’ Mutual has accused Gascoigne Halman, an agency in north-west England, of breaching its agreement with OTM by switching its listings to both Zoopla and Rightmove after it was acquired by Connells Group in October last year.
The newspaper says Gascoigne Halman had signed up for gold membership with Agents’ Mutual, meaning it helped to finance the portal through up to £54,000 of six-year loan notes. Agents’ Mutual contended it could not escape its five-year deal with the portal and should ensure other agencies within Connells complied as well.
But Gascoigne countered that the one other portal restriction was “void and unenforceable” because it constituted anti-competitive behaviour under the Competition Act 1998.
In a critical paragraph of the story, its author Judith Evans writes: “As part of its defence, Gascoigne Halman has claimed that Ian Springett, chief executive of Agents’ Mutual, suggested in a meeting with the agencies Countrywide, LSL and Connells that all three should agree to boycott Zoopla and would be compensated financially for any fall in their Zoopla shareholdings. The agencies rejected that suggestion, according to Gascoigne Halman.”
The newspaper says Agents’ Mutual has said it has filed a formal ‘Reply to the Defence’ on Monday and that at no time did Mr Springett seek to persuade the agents in question collectively to boycott [Zoopla] as alleged — either at the meeting or on any other occasion.
The company also told the FT that it had taken careful legal advice about key aspects of its strategy and that its directors were satisfied it was operating within the law.
Agents’ Mutual has been ordered to pay into court £1m — £750,000 of that by July 19 and the rest by August 30 — as security for Gascoigne Halman’s costs and to “fortify” financially an undertaking it has so far given in the proceedings.
Agents’ Mutual has brought a similar case against Moginie James, a south Wales estate agency that began listing on both rival portals earlier this year.
Moginie James has brought a counterclaim alleging misrepresentation relating to how Agents’ Mutual presented the terms of its “gold” membership.
Agents’ Mutual has rejected the claim that its policy on other portals is anti-competitive, arguing in its response to Moginie James’ defence that “its object and intended effect is to facilitate a much more competitive online property portal market than has existed hitherto”.
It said it would bring in evidence from expert economists to testify to the “pro-competitive effect” of its one-portal rule, and has also denied the claim of misrepresentation.
.png)
.jpg){kind=logo}
.jpg)
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
.png)
.png)
.png)
%20(002).png)
%20(002).jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
I can see who is going to benefit the most out of this scenario - the lawyers!
THE END >>> IS COMING >>>
Why would ANY agent want them to drop the OOP rule?! Just drop them all together- if we end up with 3 portals (and one of them distinctly weaker than the others) than all that has been acheived is the INCREASE of agents marketing spend, the polar oposite of its sole purpose.
The point is this is NOT a company it's a mutual. Spending money that quite obviously threatens ability to pay back members their loan notes without a vote or at least consultation seems very much not the behaviour of a MUTUAL. The loan notes were paid to build a portal not sue it's own members.
Please login to comment