OnTheMarket has won the Competition Appeal Tribunal case it brought against Gascoigne Halman after the agent, following its acquisition in October 2015 by Connells, refused to abide by OnTheMarket’s ‘one other portal rule’.
After the ruling OnTheMarket Chief Executive Ian Springett (pictured, below) accused Zoopla of funding the action, and also said that he intended to recoup legal and other court costs from Gascoigne Halman, particularly so because “the manner in which our opponents conducted the case has caused us to divert considerable resources and management time”.
Gascoigne Halman said during the hearings that its contract with OnTheMarket was in effect void because what it believed are restrictive clauses within it were in breach of Section 2 of the Competition Act 1988.
These include the ‘one other portal rule’ which requires participating agents to only use two property portals, the ‘bricks and mortar rule’ prohibiting online agents from joining OnTheMarket, and the ‘exclusive promotion rule’ that prevents agents from promoting their membership of Rightmove or Zoopla.
The legal process was triggered when Gascoigne Halman listed its properties on all three property portals in defiance of OnTheMarket.
OnThemarket subsequently sought a judgement on the matter through the tribunal system to prove that Gascoigne Halman had breached its contract. If the case had failed, OnTheMarket would have faced severe difficulties because it’s ‘one other portal’ rule would have been neutered.
Put on hold
Ian Springett admitted as much, saying after the judgement that OnTheMarket’s development and marketing activity had been put on hold until the judgement.
It has been a long wait – the issue kicked off in July last year, while the hearings took place in February, with the judgement published late yesterday.
In a comprehensive and lengthy 168-page document, the judges rejected the key planks of Gascoigne Halman’s arguments that the agreement between agents and OTM was a ‘restriction of competition’.
“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,” says Ian Springett.
“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.”
“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.”
One highlight of the judgement is the list of industry figures who attended as witnesses at the hearings. These included Peter Symonds of Stags and James Wyatt of Barton Wyatt (for OTM) and Glynis Frew, MD of Hunters, David Livesey of Connells, Jon Notley – until recently commercial director at ZPG – and Nicholas James of Moginie James (all for Gascoigne Halman).
WHO FOUNDED ONTHEMARKET?
The founding agents were Savills, Knight Frank, Strutt & Parker, Chesterton Humberts (now separated into two companies), Douglas & Gordon and Glentree Estates.