Estate agents warned they could be breaking competition law

Estate agents have been warned that they could be breaking the law if they reach agreement with rival firms about which websites to use for property listings.

The Competition and Markets Authority (CMA) has contacted some agents it suspects may already be in breach and has written an open letter to alert others to the potential problem.

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.”

The CMA open letter highlights three points about competition law and the potential consequences of breaking it:

• 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.

• 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 5 years and/or have to pay an unlimited fine.

Please contact Jon Alvarez if you would like more information about the issues raised in this article or any aspect of business regulation.