The CMA has written to estate agents warning them not to collude over which property portals to list on.
The CMA has issued an open letter warning estate agents that agreeing with rivals which property portals to list on may break competition law.
The move comes after the Competition and Markets Authority became aware that some estate agents may be making joint decisions to join the OnTheMarket portal and to remove their business from competing portals, rather than reaching these decisions independently of each other.
The CMA has also contacted some agents that it suspects may have been directly involved in such activity.
The CMA is working closely with the National Association of Estate Agents and The Property Ombudsman to raise awareness of this issue.
Ann Pope, CMA senior director antitrust, said: “The online portals on which properties are listed is an important aspect of competition between estate agents and the choice of portal must be decided independently and not agreed with competitors.”
Estate agents that are found to be breaking competition law in this way could face significant fines.
Mark Hayward, managing director of the NAEA, said: “All NAEA members should be aware of their obligations in regards to competition law around online property portals.
“We continue to remind members of these rules, and are happy to work with the CMA on these obligations to ensure agents act independently when deciding which portals to list on.”
Katrine Sporle from TPO said: “TPO exists to provide independent redress to buyers, sellers, renters or landlords who feel they have been disadvantaged by the actions of an agent who is registered with the scheme.
“TPO is pleased to be able to work with the CMA to raise awareness of these issues with agents, and thus provide the best possible platform for consumer protection.”
The open letter the CMA has sent to estate agents highlights three important points about competition law and the potential consequences of breaking it, as well as a previous case in which the CMA took action:
Agreeing with your competitors to restrict which suppliers you will deal with is likely to be unlawful.
The decision as to whether an estate agent will or will not use the services of a particular property portal must be determined by that estate agent alone (or by its parent company), and must not be determined jointly between competitors.
The CMA continues to monitor the conduct of estate agents.
This follows the CMA’s decision in 2015 that an arrangement on the advertising of estate and lettings agents’ fees breached competition law, which prompted the CMA’s subsequent competition law compliance work with the property industry.
The consequences of breaking competition law can be severe.
Estate agents found to have breached competition law can be fined up to 10% of their annual worldwide turnover, and directors of infringing companies can be disqualified from UK company directorships for up to 15 years.
In addition, individuals involved in certain cartel activity, such as agreements between estate agents to fix prices or allocate markets, may be prosecuted under the criminal cartel offence and could go to prison for up to five years and/or have to pay an unlimited fine.
