Words: Ashley Rigg
Published: 29th May 2008
Agent reports Rightmove.co.uk to Office of Fair Trading
Homes Matter, an English estate agent with plans to enter the
overseas property market, has made a formal complaint against Rightmove.co.uk to the Office of Fair Trading (OFT) for anti-competitive practice.
The dispute started when Founder Nigel Farren requested advertising information on Rightmove’s Choice programme, which allows agents to take out display advertising in specific geographical areas. Farren wanted his banners to promote their fixed fees (£899 + VAT) in some of the affluent areas in the counties immediately north of London. Rightmove.co.uk refused to take the advertising for “commercial reasons,” according to Farren.
Farren believes this is an “anti-competitive practice…[which] is not in consumers’ best interests and is a restraint to trade”. He also says “they are colluding with their shareholders to prevent fixed-fee agent advertising”. Rightmove is partly owned by Connells, the
UK’s 2nd largest estate agency. They are now the sole trade investor after
Halifax sold its 13 per cent stake for £59.2 million this week.
The move follows a similar complaint in January this year by UK retailer
Tesco against Rightmove.co.uk for refusing to list properties from their site, TescoPropertyMarket.com. Homes Matter’s action will give the OFT further ammunition to act against Rightmove.co.uk if it judges its actions are “anti-competitive”.
An unlikely ally
Started by a group of the leading estate agency groups, Rightmove.co.uk has always been the portal that independent agents love to hate. It’s now a public limited company charging much higher prices than any of its competitors. It works well for most but many UK agents see it as a “necessary evil”. Their position on this matter is no doubt aimed at sticking up for the majority of agents who operate commission-based business models. They are an unlikely ally but they have the support of most of our readers on this one.
It could get expensive
A recent report in the
Telegraph reported that OFT fines are up 76-fold year-on-year and they are looking for high profile companies to make examples of. They have the power to fine up to 10% of turnover which in Rightmove’s case amounts to £5.6 million (turnover was £56.7 million in 2007). By preventing consumers finding out about cheaper property deals, it could be argued that Rightmove.co.uk are exploiting their “monopoly” position. Taking page impression figures from the
Estate Agency News statistics, of the seven biggest UK portals, they have a 72% market share - well above the 25% used by the Competition Commission to define a monopoly. If it comes to it, it could be a long and potentially expensive battle. Representatives from Rightmove.co.uk and Homes Matter will sit down today (29th May 2008) to try and resolve the dispute.