On 05 July 2015, the UK Competition Appeal Tribunal (CAT) handed down a judgment that stated certain contractual restrictions were not a breach of competition law.
OntheMarket.com, a property portal, included restrictions in its agreements with estate agents who listed properties on OntheMarket.com, so that estate agents could not list the same property for rent or sale on more than one other portal.
OntheMarket.com competes with two much larger players in the online property market - namely Rightmove and Zoopla and OntheMarket’s contractual restrictions resulted in estate agents who listed with it to choose, in effect, between Rightmove and Zoopla. Two estate agents claimed that these restrictions were a breach of competition law, when faced with a claim by OntheMarket for breach of contract.
The CAT placed a good deal of weight on the pro-competitive arguments put forward by OntheMarket as part of its analysis. In particular, it emphasised that the very existence of OntheMarket.com as a contender to incumbents Rightmove and Zoopla was pro-competitive. Its assessment of whether there had been a breach of competition law was conducted through this pro-competitive "lens" and this undoubtedly affected the outcome. The CAT concluded that the restrictions were not anti-competitive - indeed, the CAT noted that “[g]iven the difficulties facing a new entrant, it would not have been unreasonable for [OntheMarket] to require complete exclusivity from its estate agent customers [rather than the semi-exclusivity of the restrictions in question].”
Whilst frequently referring to the pro-competitive effects, it is interesting that the CAT’s judgment makes little reference to portal users - those who log on to view properties. The availability of one property on two portals, rather than three, whilst not affecting the price of the property, may give the consumer more portals to choose from and power to search for the elements he or she wishes to search for. If a property cannot be listed on a given portal, then that consumer’s searching power is constrained.
A lack of market data and evidence
It is worth noting that, unlike many other cases heard by the CAT, there was no CMA or other sectoral body opinion under appeal. This meant the CAT had to undertake the competition analysis for itself, but as it noted, without the data and documents that a competition authority would normally receive in an investigation. This may have hampered its ability to rule that there was indeed an infringement of competition law, given there was - by the CAT’s own admission - relatively little empirical data to go on.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.