The chief executive of Agents’ Mutual tried to incentivise the Big Three corporates to drop rival property portal Zoopla, a tribunal heard yesterday (Tuesday).
Ian Springett encouraged senior representatives from Connells, Countrywide and LSL to “all leave Zoopla at the same time”, it was said.
The Competition Appeal Tribunal heard he offered to “compensate [them] for the damage that would do to the value of [their] Zoopla shareholdings”.
The tribunal is examining competition issues around the ‘one other portal’ (OOP) rule on the Agents’ Mutual-owned OnTheMarket (OTM).
Gascoigne Halman, a Gold member of OTM, signed up in January 2014 when it was an independent. It was bought by Connells in October 2015.
OTM was launched in January 2015 as an attempt to challenge the perceived duopoly of rival portals Zoopla and Rightmove.
The tribunal was previously told that Zoopla had offered to pay as much as £250,000 of Connells’ legal costs.
David Livesey, group chief executive of Connells, yesterday continued his evidence and said that, at the Leighton Buzzard meeting of September 2015 along with Countrywide and LSL, Ian Springett “didn’t make a formal pitch”.
Mr Livesey said that he “made it very clear that we were only interested” if the OOP rule was dropped.
Alan Maclean QC, for Agents’ Mutual (AM), said Mr Springett’s position was that they would only consider dropping that rule if the Big Three signed up to OTM.
He added that the meeting was a chance to discuss the terms on which the corporates might chose to join OTM.
Mr Livesey said they agreed Mr Springett would bring a proposal to them at the next meeting which would include dropping OOP, but Mr Maclean said: “It was confirmed that [OOP] was essential to achieving the company’s aims and should not be compromised.”
Mr Livesey said that, at their next meeting, he became tetchy because it “couldn’t have been any clearer that the only basis I wanted to hear the proposal” was without the OOP.
Mr Maclean said AM’s position was that OOP was key to its success and that the market should decide what the best portal was.
He said AM “would not have entered the market on any other basis”, but added that “If and when my client obtained some degree of market power the OOP rule may have to be rethought”.
Mr Maclean said that, if the Big Three corporates did join OTM, it would have given a not insignificant boost to the number of listings.
Mr Maclean suggested there was “blue-sky thinking” in the presentation Mr Springett prepared, but Mr Livesey replied: “This wasn’t blue-sky thinking, he had come with a specific proposal in mind.”
He added: “He was trying to convince all three of us to come off Zoopla and at the same time join OTM.”
Mr Livesey said Mr Springett “didn’t talk to us at any point in the meeting about dropping Rightmove” and said he would “compensate us for the damage that would do to the value of our Zoopla shareholdings.
“He would give us equity to compensate us for that.
“He was encouraging us, incentivising us, to all leave Zoopla at the same time. Not forcing or coercing, but definitely incentivising.”
But Mr Livesey added: “We will not have a new supplier that coerces us to do anything negative to existing suppliers.
“We sent him away to consider it without the OOP rule.”
Mr Maclean said Mr Springett “wasn’t prepared to contemplate dropping the OOP rule unless the three corporates joined OnTheMarket”.
However, said Mr Livesey, “We were never going to do that” if it impacted in any way on closely embedded relationships.
He added that all three estate agents said the same thing.
Mr Maclean asked if Mr Springett had made it clear that there was no way OTM would even have got into the market other than on the basis of OOP.
Mr Livesey replied: “That may be what he says, but I think that’s fundamentally flawed.”
He also said he had “very strong suspicions” that employees of AM were involved in discussions about collective action.
Mr Maclean said he was calling Mr Springett a liar, but Mr Livesey replied: “There’s a difference between saying something might not be accurate and calling someone a liar. I think it is probably not accurate.”
Mr Maclean said: “This is a battle between my client and Connells, and the entity in which they have a significant shareholding, Zoopla.”
He claimed Gascoigne Halman was a proxy, adding: “The suggestion that this is all to do with little Gascoigne Halman with their 18 branches: you and I both know is complete nonsense.”
Mr Livesey replied: “Absolutely not, there’s no need for this litigation.
“OnTheMarket decided to take an injunction out against Gascoigne Halman and then went straight to the injunction.”
He added that AM had “leapfrogged all the dispute resolution clauses”.
Mr Livesey also said the total costs of the litigation would “probably be £6m by the time we get done”.
Mr Livesey said: “I think it is absolutely bonkers that this kind of money, this kind of litigation, to stop 18 branches in Cheshire from listing on their competitor when they could have been spending that on business development.”
Mr Maclean said: “You know if my client did not defend the OOP rule in this litigation, it will unravel like the proverbial ball of wool.”
Mr Livesey replied: “But they have already approached [Connells] with the view to unravelling it voluntarily.”
Please see our next story for continued coverage of yesterday’s hearing.