Estate agents have launched a major legal challenge against Rightmove accusing the portal of charging “excessive” and “unsustainable” fees as pressure mounts across the sector.
The class action, filed with the Competition Appeal Tribunal, is being led by former Competition and Markets Authority panel member Jeremy Newman on behalf of more than 250 agents. The claim is seeking up to £1.5bn in damages.
Agents involved in the case allege the portal has abused its dominant position in the market by imposing rising subscription fees, with some reporting costs have more than doubled in recent years.
The legal action has already hit investor sentiment, with The Telegraph reporting more than £300m wiped off Rightmove’s market value following news of the claim.
LITTLE CHOICE
The dispute centres on the portal’s market power with Rightmove accounting for around 80% of time spent on UK property websites.
While many agents say it remains their primary source of leads they argue they have little choice but to absorb rising costs.
Jeremy Newman (main picture, inset) said: “There has been an extremely encouraging response from estate agents since we announced this legal action. The stories shared by businesses, both small and large, have confirmed long-held concerns in the market about Rightmove’s conduct.
“Filing this claim today advances the route to meaningful compensation for those businesses who have had very little choice but to absorb excessive fee increases for many years.”
CLAIM WITHOUT MERIT
Rightmove has rejected the allegations and said it will defend the claim.
A spokesperson for the company said: “Rightmove is confident in the value we provide to our partners and consumers. The potential claim is without merit, and we will defend it vigorously.”
The case comes at a time of wider pressure on the housing market, with agents facing flat prices, rising costs and ongoing uncertainty around mortgage rates increasing scrutiny on the role and pricing of major property portals.
FIRST MOVER STATUS
Property Soup reported in November last year how the action by Newman was being prepared.
He said at the time: “Rightmove knows that, due to its first-mover status, its product is considered a ‘must-have’ for estate agents.
“It exploits its dominance of the online property portal market in the UK to charge excessively and unfairly high subscription fees, both at face value and when compared with its competitors. Estate agents have had to absorb consistent, excessive price increases on a regular basis.
“My case will seek to return the overpaid fees to estate agents across the country and to rebalance the relationship between Rightmove and the agents that use its online property portal.”
