On 21 April 2016, the Competition and Markets Authority (“CMA”) published an open letter to estate agents in the UK stressing the importance of making independent commercial decisions and warning them against unlawful collaboration in breach of competition law.
It was brought to the CMA’s attention that various estate agents were entering into collective decisions to market properties solely on the OnTheMarket Portal and to remove themselves from all other competing portals, including Rightmove and Zoopla. The CMA raises concerns in its letter that such decisions threaten to weaken competition and have the potential to lead to “artificially inflated prices, reduced service quality and innovation and limited consumer choice”. No details as to the number or names of agencies involved in the suspected anti-competitive activity have been published.
The CMA takes the opportunity in its letter to highlight the potentially “severe” consequences of breaking competition law in this context; agencies and individuals alike may find themselves exposed to “significant fines”, whilst directors may face disqualification from UK company directorship for 15 years and even, in extreme cases, imprisonment for up to 5 years.
The CMA stated that it has “no reason to write to OnTheMarket in this connection at this time” but is now working closely with the National Association of Estate Agents and the Property Ombudsman to ensure continued monitoring of estate agents.