Portal Wars resume as Agents' Mutual says it's going after the money

Agents’ Mutual says it will be seeking to recover costs and compensation for losses incurred after what is widely seen as its ‘big win’ in the Competition Appeals Tribunal case against agency Gascoigne Halman.

The case was seen as a test of the controversial ‘one other portal’ rule imposed by OnTheMarket, the portal operated by Agents’ Mutual. Its conclusion yesterday has been seen as a victory by OnTheMarket itself, but less so by the City; Connells, owner of Gascoigne Halman, says it is considering its next move but has not yet ruled out an appeal.

An email sent by OTM chief executive Ian Springett to member agents - seen by Estate Agent Today - says: “The proceedings before the Tribunal have been running since July last year with the Trial completing in February. The manner in which our opponents conducted the case has caused us to divert considerable resources and management time, as was presumably intended by those who funded it, including Zoopla.

“The full judgment is lengthy and complex but its summary conclusions are clear. We will now work with our legal team to recover costs and losses incurred as well as deposit monies lodged by us in Court to cover the position had the competition law case been lost.

“A residual, non-competition law element of the case with Gascoigne Halman is still to be completed and we will update you on this in due course.”

Springett also promises to ramp up OTM’s marketing activities “to restore the strong growth in consumer traffic and leads” which he says the portal was delivering.

“Looking further ahead, your Board has been working over the last few months on substantial new plans which will support the further development of OnTheMarket.com. These plans are well advanced but could not be finalised pending the outcome of the litigation. 

“We will shortly be ready to share them with Members and, to this end, we will be contacting you over the next few days to invite you to attend one of a series of regional meetings starting at the end of this month. Our aim is to gain Members’ support for the new plans and be in a position to implement them from the end of August” Springett concludes.

In a media statement released last evening, echoing much of the email to agents, Springett adds: “The two largest incumbent portals [sic] continue to use agents’ hard-won property listings and their ever-increasing fees to generate super profits for their shareholders at the expense of their agent customers and they are defending their duopoly position vigorously.”

Meanwhile the City seems to believe the question of which portals rule the roost appears to be unchanged by the ruling.

In a note to investors marked “Status Quo” the financial consultancy Berenberg says of the ruling - released in a 168 page document - “Unless we see otherwise amongst the legal jargon, it appears that the outcome of all of this is status quo for ZPG.

“The risk/reward into this judgement was highly attractive and there is no downside for ZPG as agents continue to re-join the Zoopla portal from OnTheMarket anyway, at increasing rates (now up to 40 per month), and OTM continues to lose both housing listings and audience visits. In addition, the company has been clear that it did not assume any ‘win’ in this tribunal within its guidance or business plan.

“We continue to be huge fans of the ZPG strategy and believe there is material upside to the current share price.”

Jefferies - another financial consultancy, this time with historic links as an advisor to ZPG - was equally unimpressed, referring to the judgement as a “pyrrhic victory” for OTM.

Anthony Codling, Jefferies’ leading analyst, says: “Our take of the ruling was that the One Other Portal Rule was not anticompetitive because OnTheMarket’s proposition was too weak to succeed without such support. Secondly estate agents have an entirely free choice to join OTM and by joining they choose of their own free will to become subject to the OOPR.”

He continues to suggest that the ‘OOPR’ effectively creates another competitor in the portal market ”which the Tribunal believes would not exist without it and will cause the two dominant portals to sharpen their pencils to ensure that they are chosen as the ‘One Other Portal’.”

ZPG itself echoes all this, saying the long-awaited outcome of the tribunal makes no difference to the agency or portal landscape.

A spokesman told Estate Agent Today: “This outcome doesn’t change anything as far as we’re concerned. We welcome competition based on innovation and performance but firmly believe that OTM’s ‘one other portal’ rule is not in the interests of either agents or consumers. 

“OTM has failed to gain traction precisely because they don’t allow agents a free choice in their own marketing decisions and limit consumer choice and exposure." 

"We will continue to win back disillusioned agents who are not getting the performance and value they deserve from OTM." 

“It is pretty amazing that OTM’s existence is dependent on restricting and suing their customers. We think it is high time that OTM let their agents freely choose where and how to market their clients’ properties and look forward to competing on a level playing field when they drop this rule.”