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Agents in Devon ‘agreed consensus’ to drop Zoopla, competition hearing is told

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Agents in Devon agreed a “consensus” to drop Zoopla, it was alleged yesterday (Wednesday) at the Competition Appeal Tribunal.

However, one leading agent in the west country, representing Stags, said he had not discussed his firm’s decision as to which other portal to drop with other agents. Nor did he know which portal other agents would be keeping or dropping if they joined OnTheMarket.

Stags partner Peter Symons also denied having previously seen an email which, it was alleged, had been sent to agents in the region including two colleagues and which was described as discussing ‘the plan’.

The tribunal is examining competition issues around the ‘one other portal’ (OOP) rule on the Agents’ Mutual-owned portal OnTheMarket.

The complainant is Gascoigne Halman, a Gold member of OTM which signed up in January 2014 when it was an independent.

It was bought by national estate agency chain Connells in October 2015.

AM alleges that Connells has “long-running strategic links with, and holds a £30m shareholding in, Zoopla”.

The tribunal was previously told that Zoopla had offered to pay as much as £250,000 of Connells’ legal costs.

AM claims that by signing the ‘Listing Agreement’ back in 2014, Gascoigne Halman agreed to the OOP rule.

It says that the contract means Gascoigne Halman can only display its clients’ properties on a maximum of one other competing portal, with the agreement in place for five years from January 2015 when OTM launched.

Giving evidence yesterday, Peter Symons, senior partner at Stags in Totnes, Devon, described the OOP rule as a vital tool for the “very small beast” to break into the property portals market.

He said one of the reasons for joining OTM was the increasing base prices of other property portals. It had nothing to do with the price of added extras offered by Zoopla.

The tribunal was told that medium size or small estate agents found the AM offer “risky” but “attractive”, with Rightmove and Zoopla becoming “increasingly expensive” for smaller businesses.

Mr Symons said that once they had decided to go with AM, it was a straight choice between Rightmove and Zoopla.

He said other online portals were “utterly insignificant” to Stags and although signing with AM was a risk, the OOP rule made good business sense.

“I had seen a number of portals try and fail to enter the market,” he said.

Although the partners at Stags were “concerned” that OTM could be another failure, they would not “sign up to something that didn’t have wheels”.

Mr Symons said it was a “comfort that there was significant members to get the ball rolling”.

He was reassured by AM that 18,000 offices had signed a letter of intent.

He said: “It was clear that OOP was a good strategy for these minnows to succeed in this large pool.

“It gave Agents’ Mutual a chance. There was a need for the OOP rule.

“The OOP rule gave us comfort; it told us this had a chance to work.

“It was a very small beast in a very competitive market.”

Paul Harris QC, representing Gascoigne Halman, highlighted an email sent by Mr Symons to AM chief executive Ian Springett.

In it Mr Symons raised concerns about future issues with the Office of Fair Trading.

While Mr Symons said it was a general question as it was a big decision, Mr Harris suggested it was directly to do with excluding online agents from membership.

Mr Harris said it was to keep out the “competitive threat to traditional agencies” like Stags.

He said Mr Symons sent the email as “You realised it was anti-competitive, didn’t you, to exclude online agencies.”

In the email Mr Symons allegedly said: “It seems to me the big drama is likely to be the OFT.”

Mr Symons denied that was the case and said his email was to question whether there were any issues or dramas that might come up later on.

He told the hearing that Stags did not discuss which other portal they would choose with any other agents.

He said he had “no idea” which portal other agencies would use.

Mr Harris handed him an email from Kevin Underwood at nearby Webbers in north Devon sent to a long list of other estate agents in the area.

Mr Harris said: “This is an email showing a consensus and plan by Devon estate agents about giving notice to Zoopla, sent to two people at your firm.”

Cc’d into the email, said Mr Harris, were Simon Cooper, a partner and office manager, and professional services administrator Dianne Shirazian based at Stags in Exeter.

Mr Harris said it “discussed the plan”.

Mr Symons said that he had never seen the email before, it was not sent to him and the contents were not brought up in any meetings.

Mr Harris put it to Mr Symons that OOP “damaged offerings by Rightmove and Zoopla”.

Mr Symons said the aim was not to damage but to disrupt and get traction.

He said he was pleased with AM’s progress in the last two years.

He said: “The growth was beyond what we expected but the big boys had upped their game as well.”

Mr Harris put it to him that the role of the OOP rule was to disrupt, and take properties from Zoopla.

He said: “Nearly everyone in your part of the world has dropped Zoopla.”

He said that “90% of those that signed up to OnTheMarket have dropped Zoopla”, adding: “It was their [Agents' Mutual's] objective to replace Zoopla as the number two by January 2016.”

The hearing continued as reported in the item above.

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