Agents sent warning letters by CMA about breaking competition law

The Competition and Markets Authority has sent out warning letters to a number of estate and lettings agents saying that they may be breaking competition law.

The move follows the recent fines, totalling over £735,000, imposed on a local free newspaper, a local association of estate agents and three of its members – one a Countrywide firm and the others independents – in Fleet, Hampshire.

The CMA says that in the light of this case, it has written to a number of estate and letting agents that it suspects have been involved in anti-competitive agreements to restrict the advertising of fees.

Separately, the CMA has received complaints that other associations of estate agents and local newspapers may be engaging in similar practices, and it is considering whether to take further action.

Today, the CMA also published an open letter to agents and newspapers.

It warns that agreeing with competitors to restrict the advertising of fees is likely to be unlawful; that trade associations can break competition law; and that the consequences for breaking the law can be severe.

Businesses can be fined up to 10% of their annual worldwide turnover, and company directors can be disqualified for up to 15 years.

In addition, individuals involved in certain very serious cartel activity, such as price-fixing, may be found guilty of the criminal cartel offence and could go to prison for up to five years and/or have to pay an unlimited fine.

The letter tells agents that if they think they have been involved in illegal activity, they should volunteer that information and may benefit from more lenient treatment.

The CMA is working with a number of industry bodies, including the National Association of Estate Agents and The Property Ombudsman, to help publicise the lessons to be learned from this case and encourage best practice.

Ann Pope, CMA acting executive director of enforcement, said: “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’s investigation into the Fleet case has been closed. However, the full decision has yet to be published due to the redaction of commercially sensitive information.

Today’s letter from the CMA is here

 

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42 Comments

  1. SimonShinerock

    No comments as yet, do I detect shock I wonder? Take a look at this extract from the CMA letter under the header ‘Trade Associations’ apparently a Trade Association may be breaking competition law

    ‘where they take actions that limit the commercial freedom of their members’

    could OTM be considered a Trade Association? Does the CMA currently have OTM in their sights? We shall see.

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    1. RealAgent

      I was shocked actually Simon….shocked that you managed to post without mentioning how Ian Springett asked you to leave a meeting!

      The crucial point you seem to want to overlook is the CMA wrote to a number of people, they considered were anti competitive, in stopping others advertising fees!!!

      Your point about Trade Associations has been answered elsewhere….we are not restricted, we chose to accept the membership obligations BEFORE joining.

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      1. Woodentop

        OTM is not a trade association. You do not seem to be able to get to grips with what constitutes a trade organisation and that which is a business that is advertising for its subscribers. That I all OTM is.

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  2. wilko

    Not many comments because its nothing new Simon…….and you are experienced enough to know that. Simply because the word “cartel” has been used you have flown out of the traps to link it with OTM……you can come across as a bit obsessive sometimes, how about commenting on the article as a whole, and not turning it into something it isn’t?

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  3. GuardianIndependentObservor

    thinkproperty, propertyfinder, globebrix,  findaproperty emailforproperty etc etc etc etc sorry I cant stop laughing 🙂

    lets not all forget Lawrence of Arabia ….

    there’s more… as jimmy cricket the comedian once quipped

     

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    1. PeeBee

      GuardianIndependentObservor… a slightly belated ‘Welcome to EYE’.

      That being said, your writing style and typo/spello have me thinking however that we May have seen you posting previously – in another guise (or eleven), perhaps…? ;o)

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      1. Robert May

        Sorry Peebee, I can see where you are coming from but it isn’t me! although the spelling of  Observer along with the ‘knows something’ posts from yesterday means it could easily be me.
        I have an alibi for that lunch time post I was at a pub on Exmoor, (my first break since December 3rd )  chosen because it has no Wifi or mobile reception;  I am having a run in with the meek at the moment. They think I might be contesting the will and be after a share of their inheritance.

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  4. M Barnard

    I wonder where the CMA stands when it is ‘publishers’ that restrict the promotion of fees. Not sure if any local newspapers do but Rightmove certainly won’t accept adverts with fee promotions on their site.

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    1. Woodentop

      As you mentioned RM, how about their confidentiality clause on fee’s!!!!!

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  5. Samantha

    OnTheMarket.com is clearly & openly violating the Competition law under the following grounds:

    1. It is expressly “restricting” its member estate agents to advertise the property on other portals except one. Thus leading limited exposure to potential buyers that is detrimental to the vendor’s interest.

    2.  It is an association of Estate Agents that is attempting to weaken the competition in their respective areas. 

    3. OTM’s “only one portal” policy is an attempt to establish itself by an unfair trade practice, restricting the commercial choice of its members.

    4. OTM does not accept Estate Agent registrations unless they have a local branch. I.e. There is restriction for online agents to be a part of OTM. Again, this is a violation, as OTM is simply an association of local Estate Agents that want to restrict the growth of Online Agents by dis-allowing them to market properties through their portal.

    If there were 5 more portals like OTM, that restricted commercial freedom to its members, imagine how much overall loss this will cause to the consumer (property sellers) in terms of exposure to property buyers & to estate agents that are unable to register themselves in this so called “association”.

    There has been so many posts on EYE daily about OTM, it is simply appalling that nobody has bothered to report to the Competition and Markets Authority. 

     

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    1. Paul H

      Samantha….Is that you Simon??

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      1. PeeBee

        Must be his ‘weekend name’… just like mine’s Phoebe! ;o)

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      2. SimonShinerock

        No, it is not me, my alter ego is Mildred

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        1. PeeBee

          Mildew – I like that.  Yup – it has a certain… aptness.

          I’ll call you that in future.

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    2. PeeBee

       

      “…it is simply appalling that nobody has bothered to report to the Competition and Markets Authority.”

      Wakey, wakey, Samantha – think you’ll find while you were getting your beauty sleep it’s bin dun and here we all are laughing about it with our heads still attached to our shoulders.

      You’ve got to keep up to speed in this industry – we can’t all slow down enough for you to catch up – that’s anti-competitive, you know…

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    3. Mark Walker

      We only used 1 other portal before we signed up to On The Market.  Were we breaking your laws?

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      1. Woodentop

        Trevor would have you believe you are, isn’t it nonsense? Could you afford to? LOL.

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    4. Mark Walker

      As we are not on every portal in existance and clearly, in your opinion, all online agents are on every portal, customers will therefore be flocking to these unrestricted online agents and our business will sink like a stone.  Until then, online agents still make up less than 1% of our marketplace.  Also we were around a long time before the internet and portals.  How did we ever manage to sell clients’ properties before then?

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    5. agentgreyed

      Samantha – surely you’re aware that OTM was not set up to benefit the consumer?

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      1. PeeBee

        The non discerning consumer, you mean…?

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        1. agentgreyed

          Judging by the figures, maybe OTM should start trying to appeal to non discerning consumers

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    6. Trevor Mealham

      Well said Samantha. OTM is a CARTEL

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      1. Trevor Mealham

        Lets hope come Xmas its no longer a cartel. Lets hope its no longer anything.

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        1. Woodentop

          No it isn’t and isn’t it about time you stopped playing the “I know all about law” card, as everyone can see you don’t.

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  6. B6RKY

    I am not an OTM member. That is because I have chosen not to be at this time. I stress ‘at this time’ because I may change my mind at some point in the future (or not.) That will be my decision.

    OTM have not/can not force anybody to become a member and their membership is open to qualifying agents which number well over 10,000 so its hardly restrictive.

    Whilst I don’t agree with their ‘one other portal’ rule (and it directly keeps me from joining) those agents that do join know what they are signing up to. It is their choice.

    There does seem to be a lot of scaremongering going on here. It would seem hard to believe that the CMA have not already had a look at OTM and found there is no case to answer.

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    1. PeeBee

      Hi B6RKY.  That is a better summing up than any AM Member could offer and carries twice the weight due to your impartiality.

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    2. Trevor Mealham

      B6RKY. Maybe the CMA don’t rush in. Maybe by waiting the evidence becomes stronger. The Trinty + agents cartel was small time. There are a good 3-4 reasons why OTM is a cartel. Maybe in mind best to leave before you join.

      Portals and agent service providers must accept agents have to act in consumers best interest and not in the commercial best interest of the portal or service providers.

      The CMA, Trading Standards, HMRC, Treasury and BIS have clear rules. If portals etc don’t understand UK law, then be it £1m or £10m. Be prepared to lose if if not UK gov lawful.

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      1. PeeBee

        “Portals and agent service providers must accept agents have to act in consumers best interest and not in the commercial best interest of the portal or service providers.”

        Mr Mealham, it is pretty well universally accepted that OTM would have many, many more paying Agents populating it if it WASN’T for the OOP criteria – so please tell the world HOW THE CHUFF it can possibly be in AM’s best interests to effectively reduce its income potential in the way it does?

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        1. Trevor Mealham

          PeeBee, I’m not being rude but your looking at this blinkered.
          OTM is based on RM and Z clone tech. Its that single directional flow data schema that is part of the problem in agents being able to access more stock and get fees up.

          Your just looking at – IF everyone did OTM at a lower cost than RM or Z agents would be better off. You need to look at how agency could be better. My angle is opening more available listings to agents willing to work together.

          The CPR guidance also accepts ‘sub agency’ pg 51. Thus using the law, portals could be best compromised by agents really uniting. RM and Z are really the UK’s two biggest sub agents. If agents did more subbing one another rather than excluding one another in favour of RM or OTM or Z, then the game could lawfully change.

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          1. PeeBee

            “PeeBee, I’m not being rude but your looking at this blinkered.”

            LOL – kettle and pot spring to mind, Mr Mealham.

            Look – PLEASE DON’T talk “subbing” to me.  You know I’m not interested – you know my views on the subject so don’t ram it into a conversation with me.  Do it properly – I’m sure Ros will give you a good rate for a daily advertorial but EYE isn’t a charity and so far you’ve had around 400 freebie ones.

            In fairness to you, at least you make absolutely no effort to veil your agenda – unlike others…

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    3. the message

      I agree with nearly all of what you have said. BUT one important point missing, the consumer angle. If I am selling my home in an area where agents have colluded to go on OTM, I am not able to advertise on Z. Agents working together to collude to impact a consumer is the big risk for me. And the things OTM doesnt have on its site, which they crowed about at the start, that consumers like, means if only OTM exists consumers will be getting a poor deal.

      I dont think it is as open and shut as you think, especially when you had groups of agents making decisions together. I dread to think what some of the email traffic would look like if the CMA ever dive into it.

      This might be too small fry for them to get involved in, and if I had joined OTM it wouldn’t push me to leave, but if I had done something really stupid I would be very concerned, as the reputational damage is severe if you are found doing something that damages the consumer.

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      1. PeeBee

        “If I am selling my home in an area where agents have colluded to go on OTM, I am not able to advertise on Z.”

        OH… YES YOU ARE!

        Why would you possibly state that, when there are ALWAYS options available for vendors to list their property with Agents who use one or both of the ‘duopoly’ (credit: Robert May) Agents.

        IF, by some miracle of chance, ALL the High Street Agents in a particular location have all freely chosen to become AM Members and subsequently freely chosen to list their properties on the same alternative portal – then there are still a range of options open to any vendor who wishes their property to be listed on another portal.

        For a start, most towns have a corporate player – so there’s yer immediate starter for ten.  No need even to look further than the local High Street.

        Then, on the off-chance that the corps haven’t got one on every street corner, many Agents – corporates or ‘Numbers-Game playing independents – will offer to list properties out of their own ‘home patch’, purely on the basis that any instruction is one toward their set target.

        And then of course there are also the Online-only listing companies who will gladly take the money and publish the photos on each and every website there is (excepting, of course, OTM…).

        So I’m sorry – but your argument is null, void and woefully deflated.

        Get the message?

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        1. Woodentop

          Oh so very true, the customer (vendor) has a choice to go where they want and as those agents will also be using another web site (in addition to their own!!!!!). Your argument would be, the property should be on every web site and what business can afford that?

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  7. GPL

    Samantha? Simon? Philamena? whoever it is…. can you sort out the world petrol & diesel market first?

    Thanks.

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  8. GuardianIndependentObservor

    Thanks for the welcome PeeBee 🙂

    Sam /Simon  once you have woken up,  smelt the coffee, let me remind you of

    DMGT Daily Mail > which uses its purple property section to promote ZZzz portal

    and some of  its interesting media acquisitions (not all) over the years …

    2006 Total Derivatives Limited
    2008 BPR Benchmark
    2008 Benchmark Financials Limited
    2010 Arete Consulting Limited
    2011 Ned Davis Research Inc.
    2013 TTI/Vanguard
    2013 Insider Publishing
    2013 Centre for Investor Education
    2013 Quantitative Techniques

    oh and Investors chronic le and this is money

    impartiality  ? dont get me started on ZPG Board Members

    lets not forget ZPG signing exclusivity deals to power property search of AOL: MSN, Yahoo, Homes24, Sky and UpMyStreet 

    competition you don’t even know what the word encompasses or where it starts ……….

     

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    1. Woodentop

      Exactly and note to Trevor …. take note.

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  9. GuardianIndependentObservor

    Simon  (vested share holder… portals owner… > Ex REA  /> News International > Rupert Murdoch > News International / Newscorp Realtor > FTSE….

    Wallstreet Journal ( he likes making selective sound bites)

    http://www.wsj.com/articles/u-k-property-search-battle-lines-drawn-1421926006

    all one very big Cozzyy family

    BTW  says he lives in tax haven Monaco 🙂  @stbaker

    🙂

    what ever happened to that super portal list globally ? here’s a 20 14 PDF  press release from glamorous Melbourne , from one CEO praising another CEO

    http://www.listglobally.com/wp-content/uploads/2013/03/listglobally-edenhome-final.pdf

    🙂

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    1. PeeBee

      For those that don’t subscribe to Wall Street Journal, Barton Wyatt actually covered the story (thanks, Rummage4.com for finding that and many, many other links to this article!)

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  10. Samantha

    whoops! missed that one: http://www.propertyindustryeye.com/onthemarket-agents-warned-fined-huge-amounts/

    Has CMA clarified whats their take on this. And whether they think this needs to be investigated formally. I haven’t come across any yet.

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    1. PeeBee

      Let’s put it this way… if you want to use the outcome as an excuse to giggle yourself silly, in one respect it’s way too early – and in another you’re waaaaay too late already.

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      1. Woodentop

        Can’t resist  …. LOL. People are allowed opinions but so much nonsense is being posted on EYE these days. Well put PeeBee.

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  11. GuardianIndependentObservor

    Same old Same old from a vested share holder, btw my best advice for U ,to prolong that bitter tasting cocktail in Jimmyz or ,that warm beer ,you gulp down at the local watering hole Doc Martins … is to read Terry Pratchett  Clay Feet  ISBN-10: 0552142379  its OnTheMarket at Amazon.co.uk

    🙂  

     

     

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