Entering property portal market easy – but to do it successfully is difficult, Zoopla’s Jon Notley tells hearing

The QC representing Gascoigne Halman, Paul Harris, re-examining, asked Mr Livesey if he agreed with Mr Maclean’s description of the plans presented by Ian Springett at the Leighton Buzzard meeting as being ‘stylised scenarios’.

Mr Livesey replied: “It was a very clear business plan, it wasn’t stylised in any way.”

Mr Livesey also conceded that he did help to get the meeting put in place.

But he added: “It was very clear it wasn’t my suggestion.”

Mr Harris also asked what Connells’ shareholding in Zoopla was, which Mr Livesey said was just under 3%.

Tribunal member Peter Freeman QC asked Mr Livesey what he believed “fair competition” was.

Mr Livesey said it was coming into the market with a portal proposal and winning clients because of the nature of that new competition.

He added that it was “building business in competition, rather than saying to potential customers ‘if you join us you cannot use your other suppliers’.”

Jonathon Notley, chief commercial officer of Zoopla Property Group, then gave evidence to the tribunal.

Mr Maclean initially asked Mr Notley if there were “few people in the country with as long and successful an association with the property portal market as Ian Springett”.

Mr Notley replied: “There are not many, but there are a few. Some of the guys at Rightmove, some of the people involved in the early portals like FindaProperty.”

Mr Notley described Tesco and Google’s brief forays into the property portal market as purported attempts to enter the market.

He noted that the Office of Fair Trading had deemed Tesco as an agent, rather than a property portal.

Mr Maclean said: ‘They weren’t purported attempts, they were real attempts that failed.”

But Mr Notley said that Tesco had been “put off” by being judged to be an estate agency and “didn’t want to be subject to the legal ramifications”.

Mr Notley conceded that entering the market is “not difficult at all”, but that doing so successfully was.

He said: “If you don’t have something that’s compelling to house buyers or vendors or agents, you are going to struggle.”

He added that the reason he joined Zoopla from the Digital Property Group in 2011 was because “it was clear Zoopla had a winning position.

“It was actually a smaller team, smaller revenues, smaller customer base, but it was a winning proposition.”

Mr Maclean said that in 2014 Zoopla began “reacting to OnTheMarket’s impending arrival and [were] offering better deals’ to those agents already signed up with them.

Mr Notley accepted they had offered better deals, but added that “We have had these group negotiations in the past, therefore we are preparing to give better terms”.

Mr Maclean suggested that this was an example of “competition at work”, in that OnTheMarket’s impending arrival was causing Zoopla to offer better terms that they otherwise would have done. He said: “This is a classic example of competitive pressure from Agents’ Mutual entering into the market.”

But Mr Notley said: “I think that’s carving value out of Zoopla,” adding that Zoopla was “defending our position in any way we could at the time”.

He continued: “It is because we had a competitor coming into the market whose sole purpose was to carve value out of our business.

“We are competing with OnTheMarket and we are competing with Rightmove. All this does is set Zoopla back [relative to] Rightmove.”

Mr Notley said that the effect of OnTheMarket’s entry was “weakening Zoopla, widening the competitive gap between Zoopla and Rightmove [which] serves no one other than Rightmove”.

Mr Notley also dismissed claims that Zoopla and Rightmove constituted a ‘duopoly’ in the portal market, but admitted Zoopla were “a long way behind Rightmove”.

He said: “We don’t exist in a duopoly.’

Mr Maclean then mentioned an October 2014 letter from Zoopla to a house seller which went “viral among the estate agency industry”.

The letter, addressed ‘Dear Homeowner’, read: “You are missing out on exposure to millions of active property hunters.”

Mr Maclean accused Zoopla of “trying to set their clients against them”, adding that it was a “competitive reaction to the new player in the game”.

Mr Notley denied it was targeted at OnTheMarket’s clients, saying: ‘That’s just marketing, it wasn’t targeted necessarily at anyone.”

He added that many people selling a property had signed up to any given estate agent because they listed on Zoopla, saying that “in many cases agents would have felt obliged to have written to their  customers that they had left [Zoopla]”.

Mr Maclean suggested the reason the letter had been sent in late 2014 was because Zoopla “knew OnTheMarket was coming to the track”.

But Mr Notley said: “No, I don’t accept that. It isn’t true.”

Mr Maclean asked: “You sent the letters out because you could?”

Mr Notley replied: “Yes.”

Mr Maclean asked: “Like climbing Everest because it’s there?”

Mr Notley did not respond.

The hearing continues today

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25 Comments

  1. Ric

    OTM has clearly given end users (the most important people in this “house hunters” choice, with a wider range of services differing from agency to agency with many who could choose to list Joint Agency and be on all three anyway.

    Hammer Down, OTM Win, Case Closed.

    Why thank you your honour.

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    1. AgentV

      I hope so.

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    2. NGgibson

      Hi Ric,

      What part of anti-competitive do you not understand?

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      1. Ric

        I do, are you an agent?

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      2. Ric

        I will assume you are for now this is how I see it…… Would you EVER do anything which is technically anti-competitive? Anything in your many years as an agent where you have put a client or another company in a position where they are potentially at a disadvantage due to the nature of your actions.

        I think some have said we run a real risk with this anti competitive chit chat in our industry.

        I would only take the anti competitive **** from an agent who encourages their clients to go winner takes all every time with as many agents as they want, as you are ensuring they get maximum exposure from a whole host of agencies each with different skills and marketing reach and with no ties and no notice periods.  

        Perhaps this is Trevor’s pain, when he talks of sharing listings…… and why we all laugh never! but maybe he is right.

        NGibson, if you are an agent, whizz your stock list over to me, tell you clients I am on board winner takes all and let me get em listed today…. PS I will do it for £295 plus VAT and only on completion of each sale….. they might like that, as you can do all the local bit and I will do the pot luck they paid less bit. We all like running our businesses on pot luck don’t we?

        DONT FORGET – Make sure you tell them you want them to do this for their sake, to widen their chances of a sale and to ensure they may even get a cheaper deal! and obviously ensure you are not seen as “anti competitive” in any way. Actually wait, I will just put em on with me anyway, as I am sure your contract says they can without telling you list with any agent at any time and no fee’s to pay as a result.

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        1. Trevor Mealham

          Thanks Ric. I had an ex client call yesterday evening wanting to sell. I said locally he could get 1% for sole agency or a budget agent.

          But my advice would be to appoint a little local agent (Phil and Lynn at Philberts Tenterden) who I know goes above and beyond. Id recommend 1.5% to sub out to 6 other good agents I know.

          Portals only achieve so much reach. Philberts do RM and OTM. So with sub agents we can reach the places Philberts wont. Ie other agents applicant lists in 15 miles every which way of the property location.

          Just done another where ar 2% we achieved £20k more than the main agent who does RM and Z.

          No portal or commercial concern should restrict agents increasing seller and buyer exposure.

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          1. smile please

            If i was Philberts Tenterden if would cancel the pointless fee every month to a network and approach half a dozen agents myself and look to do a commission split.

            No need for parasites.

             

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            1. smile please

              FYI

              This super local agent Trevor has recommended has 1 property for sale on their website …..

               

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              1. Trevor Mealham

                @Smile.

                Philberts dont pay INEA a subscription.

                They do not sub at this stage. But yes dropping their OTM or RM subscriptions would make sense if they only have a single listing.

                In a local trial last year they took a sub we placed with a main agent. They went above and beyond and brought 3-4 viewers from a local paper publication the main agent wasnt in.

                They also pulled in an offer.

                So in 2-3 weeks I’ll easily take their stock up 100% at a higher fee than most agents know how to achieve pitching just portals.

                They will have to have 4-5-6 sub agents.

                The seller sold many properties via the offices I had. To him wider exposure is superior to lone/sole agency.

                I can help this local agent achieve more than sole agents.

                Giving stock to sub agents encourages subs back.

                Agents could do this direct without INEA. But we offer safe hands to help agents comply with sub agency regulations and questionable agents

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          2. Ric

            Hi Trevor, I hate saying this, I get your view if we play the anti-competitive card, but as I don’t mind admitting I am as anti-competitive as the next agent, you wouldn’t catch me doing what I have suggested tongue in cheek to NGgibson.

            I am a bit surprised NGgibson started out so promising with the debate and then goes quiet on a simple question. I think it always exposes the troll when they go quiet on a simple question, especially after someone has the decency to respond to their question.

            If AM lose…… I do hope the local Connells agents don’t have any vendors on a contract which will restrict their vendors from widening their marketing reach!

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            1. Trevor Mealham

              Hi Ric, maybe NGgibson was at ghe AM/OTM Case today and couldnt answer.

              I was there and phones had to be off.

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              1. Ric

                You are being far too nice Trevor! I am sure he was not there…. just a suspicion!

                Dare we ask how it was?

                I have £50 on a AM win! 😉

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                1. Trevor Mealham

                  If Mr Springett was getting mud flung at him this afternoon. He’d have left court covered brown. I can’t say too much. But I’d wager £100 that AM come second.

                  If I was an AM agent, I would go along and watch in the public area as I wouldn’t be too impressed by defence and some responses shifting blame from AM to agents

                  For sure Springett has owned up to with holding some evidence back from the court which came out and today there was a big bombshell against AM/OTM re founding members.

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                  1. Ric

                    Fascinating to be there I would imagine.

                    Must say, even if the case is won by AM, I still worry if OTM will have done enough to keep agents on board. An AM win means we still know in 2020 GH come off or in the meantime they simple cancel any uploads, pay their way as agreed but do nothing to help the cause.

                    The obvious outcome for a AM loss will be dropping the OOP rule and therefore potentially agents getting out of contracts based on having “not signed up to that” or hope agents join and it can become a homeowners favourite based on them (OTM) making it a great site for house hunters.

                    I suspect unfortunately the latter won’t happen and AM Customer Services will be busy cancelling contracts post a loss for their legal team.

                    I hope the AM lawyers ask Connells, if the OOP rule is dropped, will they be displaying on RM, Z and OTM or just RM and Z.

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                    1. Trevor Mealham

                      Ric,

                      On both scenarios you paint a very cheerful picture for AM/OTM.

                      Clear the pretty meadows and think of Chainsaw Massacre, or a dingy being hit by a torpedo.

                      Look up the Competition Act 1998

                      https://en.wikipedia.org/wiki/Competition_Act_1998

                      Which deals with restrictive practices. by companies operating within the UK that distort, restrict or prevent competition. These are primarily in the form of horizontal agreements (agreements to collude between firms on the same level of the supply chain such as retailers or wholesalers). These agreements could be to limit output, collusively share information, fix prices, tender collectively and share markets out.
                      Competition and Markets Authority (CMA) is responsible for prosecuting such firms who engage in these activities, and are able to levy fines up to 10% of annual UK turnover for every year in which a violation has taken place up to a maximum of 3 years.

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          3. PeeBee

            Mr Mealham

            Maybe… just maybe… you shouldn’t draw attention to individual Agencies in order to try to justify what is at best a tenuous point.

            One – they might not appreciate it – I certainly wouldn’t

            Two – you open the floodgates for people like me to gnaw at their now overly exposed ankles.

            Just saying…

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            1. Trevor Mealham

              Hi PeeBee. I put my name front line for what I believe. So I have to accept being game for knocking.

              Philberts will get the mentioned listing likely in 2-3 weeks.

              Contractually they will have to sub.

              Hopefully they will see its a pitch sellers dont mind when exposure often means more viewers and more offers.

              Insurance, holidays, motrgages. All get brokered by brokers having access to more of what they supply.

              In this sharing, big data age. Property Brokers makes a lot more sense for agents than being a budget agent.

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              1. PeeBee

                Mr Mealham

                It’s not YOUR name being in the front line I have a problem with – it’s that you have knowingly drawn (or dragged, more’s like…) others into your argument without presumably their knowledge or permission.

                THAT, in my book, is a huge no-no.

                A ‘loose cannon moment’ on your part, I would suggest.

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                1. Trevor Mealham

                  Hi PeeBee. No, Ive highlighted them as an agent that contributed to another agents marketing last year. As such I’d like to help them as stock for many lone agents is low.

                  What did I say that was adverse bout them?  I think it was another on this forum (sp) who was making bad comments and being nasty.

                  I would have no problem instructing Philberts on a property I had. (So long as they agreed to sub it out).

                  I think (not me) but another wasn’t being very nice about another agent.

                  For Philberts, as a sub agent they kept to their word, they brought in another office location and a publication and a portal the main agent didnt have access to.

                  Equally, locally they have a good name with landlords which I understand to be their prime business.

                  So not an argument. But a compliment. Equally for me later another case study to support agents supporting fellow agents.

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                  1. PeeBee

                    Mr Mealham

                    ‘What did I say that was adverse bout them?’

                    I’m sorry – where, exactly did I say you had?

                    You’re doing it again – reading something from nothing, blowing it up as the issue and using it as a line of attack or defence, instead of addressing what is actually said to you and regaining some credibility in doing so.

                    People know you all too well by now, Sir.

                    Suggest you re-read my comments – or maybe that should just be read my comments – and respond to what I actually said and not what the voice inside your head told you I’d said.

                    Think of this.  Had you not mentioned the subject Agent by name, then people like smile please and myself wouldn’t have been able to look at their businesses in the way that we have.

                    In plain English terms – smile please would simply not have been able to make the comments you now refer to as “being nasty”.

                    Maybe the Agent you have brought into this debate without their knowledge would care to comment?

                    Somehow, however, I sincerely doubt it.  They should have more sense than to stick their own heads above the parapet in the way you have done it for them.

                    For what it’s worth, I reckon they can’t wait for this article to drop into the obscure abyss of the Archive.

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                    1. Trevor Mealham

                      Sorry PeeBee – you’re unfairly ranting in fairness to me this time.

                      Why wouldn’t I compliment an agent who I found professional regardless of stock levels?? An agent who the client I am soon to pass over a listing to has heard good things about !

                      Please read again, because I didnt say you had been nasty. But ‘smile’ is having a knock unjustly.

                      The fact the agent has however many listings for sale or not is of no concern to me. I’ve said due to their efforts in helping another agent in a successful main/sub agency trial last year, I was impressed in what they contributed. They did everything by the book (and beyond).

                      I also mentioned them to the seller to be and he has a friend who uses them for their lettings who talks highly. As such in this case I’m willing to help them to help this ex client who has contacted me.

                      For me the deal is that they have to sub out as a main agent. Onwards, by showing lone agents this process, I may even get them join in agent to agent collaboration.

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                    2. PeeBee

                      FOR CRYING OUT LOUD, Mr Mealham!

                      I asked you to do one thing – in your own best interests – to read what I type and to respond to exactly that – and not what you somehow manage to read into it.

                      So what do you do? Exactly the opposite.  YET AGAIN.

                      People draw conclusions from what they read on here, Sir – and you do favours to yourself, and therefore your business, when you continually display a severe lack of understanding and execution of basic communication skills.

                      Suggest you blame it on having had a long day, retreat and regroup and control your thought processes and make yourself promise to do better tomorrow.  Or the next day.

                      ANY day, for that matter…

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  2. Woodentop

    So Z offering to pay some of Connells court costs isn’t one sided either?

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    1. 1stTimeBuyer

      In a similar way payments/donations on made to political parties you mean?

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  3. P-Daddy

    Oh Woodentop…they are doing it as a gesture of good will obviously…they have no axe to grind..

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