Online estate agent eMoov is under pressure for making unsubstantiated and misleading claims to home sellers over fees and asking prices, while their lodged complaint with the Competition and Markets Authority (CMA) against OnTheMarket (OTM) will not be followed up by the regulator. The CMA took over many of the functions of the Competition Commission and the Office of Fair Trading last year.
Having investigated claims made by eMoov in an advert that its sales performance last year resulted in 99 per cent of the asking price being achieved for its clients compared to the national average of 96 per cent, the Advertising Standards Authority (ASA) concluded that that the statements were unsubstantiated.
ASA said that sales data only covered the period of January to September 2014, while no comparable information relating to asking prices achieved by traditional estate agents in London was provided.
The online estate agent also claimed that its customers had saved more than £11 million in fees by using its services because its business model depended on it selling a higher proportion of its inventory. But once again, this was panned by the ASA because it was based on the average fee its customers paid instead of actual fees, which was said to have been double that of the average fee on occasions.
eMoov has been ordered to remove the advert in its current form by the CMA which is currently in the process of writing to all estate agent nationwide to warn them they are breaking the law if they agree restrictive adverts with newspapers.
The watchdog is informing agents that they are at risk of breaking the law if they cut anti-competitive advertising deals with newspapers barring the display of all fees and discounts in the industry.
Ann Pope of the CMA told the press, “The CMA is keen to work with businesses across the property and newspaper publishing industries to explain the implications of this case and ensure they understand what they need to do to comply with competition law and can recognise where they may be at risk of breaking it.”
Companies that break competition law can receive a significant fine and company directors can be disqualified for up to 15 years.
Meanwhile, eMoov’s official complaint with the Competition & Markets Authority (CMA) accusing OTM of running an illegal cartel will not be pursued, it has been formally confirmed.
eMoov Chief Executive Russell Quirk (left) filed the complaint against OTM last October on the grounds that the new portal was operating an illegal cartel being run by a handful of estate agency directors to form a protective entity, engaging in anti-competitive practices by preventing members from freely advertising on all other major portals and from excluding online estate agents from listing their properties on the website.