After a year of legal shenanigans, the Competition Appeal Tribunal has decided in favour of agent-owned property portal OnTheMarket over 18-branch member agency Gascoigne Halman, which argued that the “one other portal” rule is in breach of the competition rules.
It all started last July, when OTM took South Manchester/Cheshire firm Gascoigne Halman to task over an alleged breach of contract; the company switched its listings to the two incumbent property portals, Rightmove and Zoopla, after being acquired by Connells. OTM said that’s not allowed under the terms of its membership agreement, and sued.
GH said no, countering with an attacking play; the agency argued that three core elements of the OTM agreement breached Section 2 of the Competition Act 1998; these elements were:
- a rule by which an estate agent member may list its properties on no more than one other portal (the “One Other Portal Rule”);
- a rule restricting membership of Agents’ Mutual to full-service office-based estate or letting agents, as opposed to agents operating only online (the “Bricks and Mortar Rule”); and
- a rule requiring members to promote only OnTheMarket and not any other property portal (the “Exclusive Promotion Rule”).
Four months after the hearing closed, a trio of judges acting for the Tribunal have now decided that all three of these are actually fine within the Competition Act framework, noting specifically that “the [One Other Portal] rule did not form part of a wider concerted practice to ‘boycott’ Zoopla and was not invalid on that account.” Overall, the launch of a third major property portal to challenge the incumbent Rightmove/ZPG duopoly was “prima facie pro-competitive as it reduces the common costs of competing estate agents”, said the ruling.
OnTheMarket (operated by Agents’ Mutual) is not being shy in declaring victory, claiming that the purpose of the whole case might have been to “divert considerable resources and management time, as was presumably intended by those, including Zoopla, who funded it.” The company is now setting about recovering “costs and losses” from the vanquished faction.
Ian Springett, Chief Executive of OnTheMarket.com: “The Competition Appeal Tribunal has now issued judgment in favour of Agents’ Mutual in relation to our legal proceedings against Gascoigne Halman.
“We are pleased that the Tribunal has confirmed the position maintained consistently by our Board that Agents’ Mutual’s strategy for entry to the portals market has been pro-competitive both in object and effect and that the business is operating within the law. The Tribunal has dismissed the challenge from Gascoigne Halman that Agents’ Mutual and its Members have behaved illegally or anti-competitively.
All of the key terms of our listing agreements with agents and our membership eligibility rules have been upheld
“All of the key terms of our listing agreements with agents and our membership eligibility rules have been upheld.
“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, including Zoopla, who funded it.
“The full judgment is lengthy and complex but its conclusions are clear. We will now work with our legal team to recover costs and losses we have 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 against Gascoigne Halman is still to be completed.
“In the immediate term, we will be ramping up our marketing activity to restore the strong growth in consumer traffic and leads OnTheMarket.com was delivering over its first two years of operations.
“Looking further ahead, the 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 our Member firms. Our aim is to gain Members’ support for the new plans and be in a position to implement them from the end of August.
“The two largest incumbent portals 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. However, with an excellent online platform, the sustained support of thousands of high quality agents and a highly experienced team, OnTheMarket.com is well positioned to create a genuine alternative market-leading portal for agents and consumers alike.”