"'vertical agreement' means an agreement or concerted practice entered into between two or more undertakings each of which operates, for the purposes of the agreement or the concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services"
"Springett 1" (17 February 2016 ), "
"9. As a demonstration of our commitment to [Agents' Mutual] and its objects in accordance with the terms of this letter we hereby apply for membership of [Agents' Mutual] (in accordance with paragraph 10 )… 10. Subject to paragraph 11 , we hereby give notice of our application for membership of [Agents' Mutual] and confirm that we understand that any such membership shall be subject to the provisions of [Agents' Mutual's] Articles of Association and Membership Rules a copy of which we confirm has been made available to us. We hereby agree to comply with and be bound by all the provisions of [Agents' Mutual's] Articles of Association and Membership Rules. 11. Where we are a franchisee and form part of a wider franchise group (the "
"[Agents' Mutual] shall have power to alter or repeal the rules or bye-laws referred to in Article 25.1 and to make additions thereto. The Directors shall adopt such means as they deem sufficient to bring to the notice of Members all such rules or bye-laws made pursuant to this Article 25 which, so long as they shall be in force, shall be binding on all Members."
"(A) In consideration of admission as a Member, each Member agrees with the other Members and [Agents' Mutual] to adhere to the Articles, these Membership Rules and any Agent Listing Conditions. (B) The Members shall together exercise their rights as Members to procure that [Agents' Mutual] adheres to the Articles and these Membership Rules where applicable. (C) These Membership Rules shall apply to any subsidiary of [Agents' Mutual] (as far as the same is applicable). (D) The definitions applicable to these Membership Rules are set out in Schedule 1 ."
"We confirm our understanding that [Agents' Mutual] will, through its directors, seek to implement the requirement during the Listing Period that we list our UK residential sales and lettings properties on the Portal and our website together with a maximum of one other competing portal ("
"A membership shall cease: 2.4.1 automatically in the event that a Member confirms to [Agents' Mutual] that it no longer wishes to use the services of [Agents' Mutual] in accordance with the terms of any Agent Listing Conditions; or 2.4.2 at the determination of the Board if a Member has not used the services of [Agents' Mutual] during a Financial Year; or 2.4.3 following a material breach by the relevant Member of the terms of these Membership Rules, the Agent Listing Conditions or any Listing Agreement (which shall include but not be limited to the breach by the Member of any payment obligations, co-branding obligations, exclusivity requirement or requirement to list certain properties on the Portal contained therein); or 2.4.4 otherwise in accordance with Articles 3.5 and 3.6 of the Articles."
"1. Subject to paragraph 6 , with effect from the date set out in the Listing Notice (as defined below), we agree to list all and only our directly-instructed and available UK residential sales and lettings properties on the Portal for a period of 5 years (the "
"…in relation to a company, that company, its subsidiaries, any company of which it is a subsidiary and any other subsidiaries of any such holding company and each company in a group is a member of the group. Unless the context otherwise requires, the application of the definition of Group to any company at any time shall apply to the company as it is at that time…The words subsidiary and holding company mean a "subsidiary" and "holding company" as such terms are defined insection 1159 of the Companies Act 2006 ."
"(1) A company is a "subsidiary" of another company, its "holding company", if that other company– (a) holds a majority of the voting rights in it, or (b) is a member of it and has the right to appoint or remove a majority of its board of directors, or (c) is a member of it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it, or if it is a subsidiary of a company that is itself a subsidiary of that other company. (2) A company is a "wholly-owned subsidiary" of another company if it has no members except that other and that other's wholly-owned subsidiaries or persons acting on behalf of that other or its wholly-owned subsidiaries."
"It is therefore necessary to examine the nature of the cause of action asserted by the 22,000 claimants. It is a contravention of rule 3.4(4)(a); to "ensure that" company representatives comply with the Code of Conduct. A duty to "ensure that" something does or does not happen is the standard form of words used to impose a contingent liability which will arise if the specified act or omission occurs. Even if the act or omission is that of a third party, such as a company representative, the liability is not vicarious. The company is not liable for the representative's act or omission: that is simply the contingency giving rise to the company's own liability. Nor should one be misled by the word "ensure" into thinking that the effect is to impose upon the company a duty to do something. No doubt the company will be well advised to take whatever steps it can to prevent the contingency from happening, but the question of whether it took such steps or not is legally irrelevant to its liability. It is liable simply upon proof that the contingency has occurred."
"Agents Mutual Ltd has come into being as a result of an individual agent initiative followed by a two-year project to shape a response for agents to developments in the property portal website market. These developments have given rise to concern among agents about the pace of price increases, deteriorating quality of service and adverse conditions of listing being imposed on them by the major property portal groups. During 2012, the OFT investigated the portals market as it was required to determine whether a proposed merger between DPG and Zoopla should be referred to the Competition Commission. It found that the only way to create a viable competitor to the dominant and super-profitable Rightmove was to allow the merger to proceed. It reasoned that the creation of such a competitor would provide agents with an alternative to RightMove, thereby providing a limit on the price increases it could impose. However, it noted that if agents felt obliged to list on both Rightmove and the newly formed Zoopla Group sites, then no increasing rivalry would be created. Early indications since the merger are that, far from providing a constraint on Rightmove, Zoopla Group is simply adding to the overall costs of listing agents by requiring them to list on all its sites (or none) and dramatically increasing prices. There appears to be every chance that what has been created in the portals market is more akin to a duopoly than a rivalry which will benefit agents and consumers. The agent firms which have created Agents' Mutual Ltd believe that there is another way to create a true competitor both to Rightmove and to Zoopla Group. Whilst barriers to entry are substantial and potentially insurmountable to non-agent ventures, a new portal owned by agents and run with the aim of improving service and reducing costs to them, their customers and the property seeking public can win through in the medium term. In order to form a solid platform for the development of a new portal, Agents' Mutual Ltd is seeking commitments from agent firms having, between them, at least 1000 offices. These firms will provide, by way of loans and membership fees, all of the working capital needed to establish and grow the business. Agents' Mutual is a Company Limited by Guarantee so that all its members will have a shared interest in it and no sale will be contemplated. Around£3.2 million is required to fund pre-launch expenditure. The sum of£3M will be raised by issuing loan capital to the 'first 1000' firms on the basis of£3000 per office. The interest payable of 15% per annum will be covered, in the first year, by a£50 membership fee per office per month. As well as receiving an attractive loan interest coupon, the firms comprising the 'first 1000' offices will benefit from a 20% discount on the standard tariff of listing fees which are fixed for all firms committing for the full post launch 5-year period. In order to achieve a viable market entry, members will be required to list on the new portal and on a maximum of one other portal only. The effect for many agents will be that their total expenditure on portals will be the same or less than now. This requirement will be implemented after launch. Agents will also be required to help promote the new portal in various ways."
"As indicated above, the OFT did not refer the DPG/Zoopla merger to the Competition Commission on the basis that it believed the combination would create a stronger competitive rival to Rightmove. It believed this would enable agents to switch between Rightmove and Zoopla Group and that this would provide a constraint on the ability of those portals to raise prices to agents. However, the OFT did note that if agents found that they had no commercial option other than to list with both Rightmove and Zoopla then 'the merger would not significantly enhance rivalry'. This rather understates the potential impact on agents of such a situation. In practice, it would mean continuing rapid price growth by Rightmove and the commencement of rapid price growth by Zoopla Group, limited only by the maximum budgets affordable by individual agents to be spent on portals. An effective duopoly would be created, with two powerful players able to dominate their agent customers. This would not only lead to higher listing fees but will also lead to further spending to achieve additional brand visibility with both portal groups (via "
"Given the powerful established competition, the new portal would ideally require its members to list their properties exclusively, so that they were not listed on any other portal. This was part of the market entry strategy adopted by Rightmove and also, subsequently, by Primelocation. However, as indicated above, it will take time for the new portal to become fully effective and agents are now heavily reliant on the leads they receive from the portals. Accordingly, the requirement will be that members list on the new portal website and on one other portal website only. This requirement will be implemented after the new portal launches. Whilst not as impactful as full exclusivity of listings, it will create: • Some disruption of the market as agents switch from other portals to the new portal; • An opportunity for agents switching to promote the new portal to their vendors, landlords and applicants and to the wider public; and • A consumer proposition that the new website is the only place to view every property from the agents listed with it."
"8.1 Following the creation of [Agents' Mutual] and the appointment of the Board, the next key step was gathering sufficient commitments from estate agents around the country. It was essential to sign up as many agents as possible to ensure that (i) there were sufficient numbers to make the project viable; (ii) the [Agents' Mutual] portal had a sufficient number of properties listed to attract and satisfy property seekers on launch day; and (iii) [Agents' Mutual] would have sufficient capital to allow it to build the portal, create the organization and invest significantly in marketing and advertising. 8.2 [Agents' Mutual's] objective was to recruit prospective agents at meetings and roadshow presentations as described below. Having attended a meeting or presentation, prospective agents would be invited initially to sign non-binding letters of intent which [Agents' Mutual] would seek to convert into formal contracts once a sufficient number of agents had shown commitment to the venture. Initially [Agents' Mutual] sought firms with a total of at least 1,000 offices to commit to [Agents' Mutual] in order for the venture to proceed – these initial agents would be the "
"I met with Ian Springett yesterday and we had a full blown discussion about the new portal. My overall impression is that if they can reach the critical mass (number of agents) that they require then this really does look like a possible winner. Many of you have already made contact and have seen the package and so I won't go into detail other than to say that there will be gold, silver and bronze membership. … Their plan is based upon most agents initially dropping Zoopla to go with them and then eventually dropping Rightmove as the new portal becomes the major portal. However, I reminded Ian that in the Midlands and the north Zoopla are nowhere as popular as in the south east and London. Their view on the savings we would make therefore vary considerably dependent upon whether you are with Zoopla or not, on the basis that Zoopla will be the first to go. Companies with 50 offices or more receive a substantial discount on the subs per office per month and so I suggested that we might prefer to join as a group since we have well over 50 offices between us. However, Ian felt that this was probably not possible because everyone would then simply start to form groups to obtain the lower rate, which would then defeat their financial plan. I did however point out that IEAG was an established network and possibly the oldest current network of agents in the UK and that if we had to it would be quite easy for us to form a franchise agreement between us to obtain the lower rate. (Keith's idea – not mine!) I pointed out to Ian that if the whole network came over then it would be quite a coup for him to get us all in, in one go, and on that basis he said he would reconsider the group discount but I have to say my feeling is that it is probably unlikely that the founding of [sic] directors would agree – let's see…" (2) In an email dated7 June 2013 to various estate agents including Mr Flint and Mr Abrahmsohn, Mr Springett provided an update on progress in terms of which estate agents were proposing to join Agents' Mutual. This email contained a number of references to estate agent groups, either extant or in the process of being formed. (3) In an email dated14 June 2013 to Mr Ozwell, Mr Springett offered a group discount to IEAG members, which would be triggered if all the members fulfilled certain obligations, including signing their Letter of Intent by mid-July 2013 and actively promoting Agents' Mutual. Mr Ozwell forwarded the proposal to the IEAG members and asked for their views. (4) Mr Springett approached Gascoigne Halman in June 2013: (i) Mr Springett met Gascoigne Halman on20 June 2013 . Gascoigne Halman was an attractive estate agent because it was "a prominent regional independent firm which it would be necessary for [Agents' Mutual] to attract as a member, both in order to build a credible network in the North West of England, and to develop the UK-wide network. [Gascoigne Halman] is the leading estate agent in South Manchester, North East Cheshire and the High Peak, having 18 offices across these areas. [Gascoigne Halman] is also a member of a larger group known as the Relocation Agent Network ("
"That is terrific news. Thank you very much for your support. I am pleased to be able to say we already have a letter of intent from Ryder & Dutton (Richard Powell dealing). Richard is attending our upcoming Yorkshire meeting as they have some offices there but I know the bulk of the operation is in Lancashire so they will be involved there too. I will now contact Farrell Heyworth (as part of the [IEAG] discussions) and the other names you mention. We will also develop the list I mentioned we had received from Andrew Snape. We also have other useful links in the region because of the founder members offices and there is a growing number of firms in and around Manchester who are registering at www.agentsmutual.co.uk. I will keep you advised as we go. May I take it that you are willing for us to make judicious use of the fact of your Letter of Intent when communicating with other firms outside the [IEAG] group?" (iii) Mr Halman's response, again on21 June 2013 stated: "
"The current duopoly will take over an ever increasing share of our profit and the proposition will mean that agents can only be on one of these two sites together with Agents' Mutual. In our area this is likely to result in the demise of Zoopla although in other areas such as central London the individual decision of companies is likely to be much closer. I think this is the most constructive proposition that has been put to agents to date to have a mutually owned website which is a defensive measure against the portals adopting and offering in the future for "owner for sale"
"I personally found the meeting yesterday very informative. There is only one way Rightmove can grow and meet the expectations of the City/Shareholders and that is to put prices up and sell us more products we probably do not need (e.g. micro sites) as they do not have a product to sell other than our data. Therefore they will continually find ways to repackage and sell it back to us This by default will allow Zoopla to push their prices up The information on estate agency software providers was also alarming Over 10 years [a]go the agents in the north east got together to launch the Househunter as we were all paying approx.£2000 a page and the impact was rates came down and even today the rate is circa£400 a single page. I would suggest if you are in agreement we hold a further meeting locally to discuss the Agents Mutual as I will be recommending to the Directors of Jan Forster Estates that we give the matter serious consideration …I do not want to become a dinosaur If you are interested please email me by return and forward this email onto others you know who attended the meeting (or did not) if you have their emails Jordan (I AM sold) could you forward this email to Ben who was at the meeting" (iii) Mr Henning continued to report positive feedback he was receiving from other estate agents (which communications he copied to Mr Springett). In an email dated18 July 2013 (also copied to Mr Springett), he said: "
"I think following on from discussions within our company and to other agents, we are in broad agreement that something needs to be done to tackle Rightmove and Zoopla and their ever escalating costs! The question for a lot of agents would be which portal to drop – Rightmove or Zoopla. On the face of it, I think the obvious choice would be to drop Zoopla on the basis of Rightmove's market share/no of leads it generates in comparison. HOWEVER, in reality if every agent does that up and down the country, Zoopla would disappear as an effective force in the market and it would only go to strengthen Rightmove's hold. Ultimately Agents Mutual would probably just replace Zoopla. This therefore puts us in a unique position! I would therefore propose for your consideration the following – every agent in the North East drops Rightmove (therefore meaning there is no competitive advantage which agents could 'use against each other' for marketing purposes.) The balance of power then suddenly changes. The effects of this would be thus: • Rightmove sits up and takes notice – it puts US the agent back in control. • It instantly changes the playing field and puts Agents Mutual in a strong starting position • We will then be in a very strong bargaining position with Zoopla. IE if we get the Zoopla directors up in front of every agent in the North East and say we will drop Rightmove and use your services but for that we want a substantial discount in writing for X no of years. • From a buyers/sellers point of view they would be forced to use another website as no / very few properties in the North East would be listed on Rightmove • I daresay this rebellion would make national news and make other regions take a similar view • Reduce your marketing costs. However, this approach would have to be unanimous – it simply won't work if one agent says yes and one agent says no. I think we would also need to sign a legal document so there is no backtracking within a set period of time." (v) This approach received support from other estate agents, who differed however in their views as between Rightmove and Zoopla. In an email dated20 July 2013 sent to a number of estate agents and copied to Mr Springett, Mr Henning said: "
"Many thanks for your hard work on this. Looks very exciting! However, I do need to speak to you regarding any attempt to reach a collective agreement on which portals to drop/remain on. There are competition law issues which you could be exposed to. The bottom line is that each individual firm must make it's [sic] own independent decision to [sic] other portal (if any) to choose. There must be no agreement between agents on these matters.
"Ah – I didn't appreciate you had legal advice on tap! Please be mindful of it in relation to what gets circulated – we don't want anything out there which could be used against you all.
"I have read Jonathan's well thought out email in more detail However, as competitive firms we all have to make our own decision as to which portal we withdraw from (i.e. what is right for our/your business) If we all agreed the same portal and entered into a written agreement to come off only Rightmove or Zoopla the other portal would have a legal comeback and we all know both parties financial clout! I suspect we could therefore not enter into written legal agreements together …On Monday I will seek detailed clarification from Ian Springett/Agents Mutual on this matter. [29] …However, what is clear is that while we must act independently we all have an equal opportunity to move this forward." (6) In an email dated13 August 2013 , Mr Ozwell encouraged the IEAG members, if they had not already done so, to sign up to Agents' Mutual which was "gaining ground quickly"
"As well as being an agent in Bristol I am also company secretary of our own agents owned paper and small internet search platform. We have about 16 member agents who set the paper up and lots of other agents in Bristol and surrounds who now advertise in it both online and in print. I know many of the members previously supported the Radarhome venture and are keen to find a solution that provides a solution like agents mutual. Several I know have also previously made contact independently. Not sure how many office in total are represented but at a guess between 50-100 with most of the leading firms in Bristol part of it. The reason for dropping you a line is that we have our AGM and annual drinks party coming up in a few weeks and feel it would be useful to perhaps be able to present a bit more info to the members and other agents to see if we can get critical mass of support to join up on launch and drop the other portals (except RM? To start with) as this has always been part of the process of setting up the paper and website."
"We met Jon Notley from Zoopla yesterday in what was a very positive meeting. One thing that occurred to us is what are the founder and board member companies intending to do when choosing a portal partner with AMP? This would have an influence on other members as it would give a big indication to others on how Rightmove or Zoopla might be strengthened or weakened. We are favouring Zoopla as is Clive Rook in the NE. Whilst local coverage is the main driver to us a heads up on the national scene would help. Rightmove are now trying to 'pick us off' individually and are not prepared to speak to us as a group. This is feedback I have had from others as I have not met them yet! One claim they are making apparently is that large companies including 'founder members of AMP' are contracting with them as well as Zoopla into 2015. Obviously that is against AMP rules and I presume propaganda tactics from Rightmove on their well tied [sic] and tested 'divide and rule' tactics with agents. Any info on this latter point as well as your thoughts and comments would be good as well." (2) Mr Springett responded on the following day: "
"Ian Thank you for your email. Having now met and listened to Rightmove (I barely had the chance to speak) I can personally now confirm that they are strongly promoting the myths that AMP board members & others are committing to two other portals into 2015 and went so far as to say that of the 70 'large agents' he had met only 1 had said that they could not commit to Zoopla & Rightmove because of the AMP rules. I suggested he had better add one other to his list then as we could not commit to something that we were legally contracted against doing! We will have to see what our agents group view is when we report back to them on these discussions as Zoopla were in contrast very helpful and positive in their discussions with us. We are awaiting their final proposal before we report that to other members of our marketing group. There does still seem to be a strong body of support within our grouping to go with Zoopla but time will tell if that holds firm! I will await Michael's call." (4) The reference to "
"As key members of Agents' Mutual in the North East, I thought you might find it helpful to receive the attached schedule. It shows all agents in the NE/DH/SR/DL/TS postcodes who have registered via our website and – in column B – whether they have yet signed up as a Gold or Silver member. There will, of course, be many firms who have yet to engage with us on any level and we will be working to contact all of them as soon as possible. I know that Steve Henning plans to invite existing members to meet shortly to consider how you might support further member recruitment and also the potential for portal negotiations. I am pleased to say that we have hired some excellent people to operate as our Field Sales Executives in the region and I will let you know more details as soon as their 'territories' have been agreed. Thank you very much for all your support so far."
"I understand that you were away but perhaps you would kindly send me an email to advise when I could telephone you for a chat. Our group in the North East is very keen to establish group discussions with Zoopla and Rightmove, and I am sure your experience will be helpful to us." (2) Mr Rook and Mr Jones obviously spoke on26 March 2014 , for later on that day, Mr Rook emailed: "
"I just wanted to check the legal issues surrounding the NE meeting. The meeting is officially a Marketing Forum for the agents mutual members in the North East. As part of that agenda, they will be negotiating with Zoopla and Rightmove for a collective rate to list with them. That obviously could link to a collective decision for them to choose to list on 1 particular portal and hence a collective decision not to list on the other portal. Does that create any legal issues and is there an issue with Julie [Emmerson] being present when those discussions happen?" (2) Mr Springett responded on the same day: "
"But is it OK for them to make a group decision to come off a specific portal through a meeting like this? And can Julie be present when they discuss it – or should she leave at that point?" (4) Mr Springett's response was as follows: "
"If you read through the notes below – you will see that the meeting agenda needs to be structured in a certain way and indeed you cant [sic] be present when it gets to the discussion on media negotiation or other portal choice! I am really sorry – this probably effects [sic] how the meeting is ordered. Lets [sic] have a chat when you get a moment." (6) The chain was then forwarded by Ms Emmerson to Mr Rook. Mr Rook responded (to Ms Emmerson, Ms Whitely and Mr Springett) with: "
"Best meeting to date! About 25 turned up incl good show from AM members. Tv ad wouldn't play but am sending presentation to everyone so they should be able to access it. I left the room and they got into "the 2nd portal debate" feedback suggesting overwhelming desire to drop RM and Z. Speak to Andrew Craig for his feedback." (3) Mr Rook responded with "
"Nigel, Thanks for update, I had a good chat with Jon Notley (Zoopla) yesterday as preparation for our NE group meeting on September 10th. He was optimistic about the reception received by your group and intends to make a similar offer. He indicated that there may be at least three other sizeable geographic groupings which could also receive a 'group' offer." (3) On2 August 2014 , Mr Jones emailed Mr Rook and other (unknown) addressees: "
"Thanks for this information. The current position is very interesting. I will discuss tactics with our group leaders this week. I currently have no idea what most people want to do but the guidance notes you sent are thought provoking. Do you think RM will meet with you?, have you asked them? Jon Notley at Zoopla told me he may be talking to as many as 5 AM regional groupings, do you know of the other 2?? The next few months will be interesting. I'll keep you posted re NE developments." (5) Mr Jones responded on4 August 2014 : "
"Ahead of your upcoming meeting with Zoopla, I have prepared a note with a few thoughts on the prospective group deal for your personal use. I don't know what you will be offered so have left the table blank. I hope you find it helpful although you and others in the North East Group have probably considered all the points made and more. I hasten to say that I would never presume to tell any AM member what to do – still less a group as cohesive and advanced in its thinking as yours. Should you decide to share any of the content of the note, may I ask that it is not attributed to AM/me." (7) The note stated: "
"Dear Ian, We have a local leaders meeting next week to prepare for the Z presentation. Thanks for the note which is very helpful. We will discuss the points on a strictly unattributed basis. Strong and varied views are held but this meeting will be the first at which members begin to nail their colours to the mast. I am keen to avoid any premature decisions being made or views becoming entrenched as I am still pushing the message that recruitment is still the priority so that membership is so strong that all options are available. I believe that if the idea that a decision has been taken took hold too early it may hinder recruitment. Do you have any thoughts on this aspect? I see SW agents are active in a group and Jon Notley (Zoopla) advised possibly 5 groups are in in [ sic ] discussion. It seems important that all groups communicate and coordinate tactics. I realise that you cannot get involved except to put groups in contact. Do you think RM will talk?..." (9) Mr Springett responded on6 August 2014 : "
"As signed up members of Agents Mutual you will be aware of the North East Agents Marketing Group. For some reason I volunteered to be the facilitator for the Tyne Valley. I thought it may help if I made a suggestion to a few of the main protagonists to canvass views as to how we could work together for mutual benefit, before seeking support from the remainder of the agents. We recently held a meeting at my offices to encourage new members of AM but to also begin a discussion as to how we can strengthen the Agents Mutual proposition and cut our marketing costs. Of course we are all in competition with each other but that does not mean we cannot join together where by doing so we can reduce our costs. Whilst it would be nice to believe that on 1st January we all gave notice to both Rightmove and Zoopla and simply listed on Onthemarket, it would take a great leap of faith for us to do this for fear that other agents would use it against us. That is of course what Rightmove will rely on and unless we can work together we will only have ourselves to blame when they come with year on year increases. All of us have bought into AM because we want to reduce our portal costs and it is really the next stage that I hope we can discuss. On the assumption that Rightmove will be the preferred second portal of choice unless Zoopla can come up with an exceptional offer on 10th September we could I think agree between us how we can stage a gradual withdrawal from Rightmove by growing confidence between us in taking a group position in at least the Tyne Valley. I suspect like us you will all be getting a visit from Heather Black in the coming months wanting to sign us up for all sorts of add on's [sic] and on a 12 month contract. My suggestion is that we all agree to the following: 1. Only agree to 1 month rolling contract on Rightmove. 2. Take only the basic package for each office with no add ons, premium listings etc. 3. Whilst we would not tell Rightmove we seek to delay the feed to Rightmove by 48 hours for new listings. We can say all properties will be on our own websites first and still be able to confirm to vendors that their property will appear on Rightmove. If we all agreed and stuck to this it would give us confidence to take the next step of coming off Rightmove once the consumer is aware of Onthemarket as an alternative. In the meantime it should reduce our costs and make Rightmove a slightly weaker proposition. Of course Rightmove may realise they need to talk to us as opposed to their current position of not talking to agents in groups, ie the divide and conquer strategy, or they may stick to their belligerent approach and simply increase the basic package costs. If they take the latter line I suspect it will anger agents to the extent that the next stage becomes easier." (11) Mr Foster of Foster Maddison estate agents responded on8 August 2014 : "
"Nigel Thanks for forwarding the Zoopla offer details. Please find attached a note with some comments/thoughts for your personal use. I hasten to say that I would not presume to tell any member what they should do and still less a group as sophisticated in its approach as yours. But I hope you will find it helpful. May I ask that if you are minded to share any of the content, that it is not attributed to AM/me. I think what you are achieving in West Wales is terrific – good luck with the meeting and thanks for your continued support."
"This is a summary of the agents meeting held yesterday and is being sent to all agents that have signed up to Agents Mutual primarily to confirm what was agreed to those present but also to inform those that did not attend and to receive the comments of support, query or otherwise, from those agents. "
"Just to let you know that I had an interesting conversation with Clive on Friday. He was saying that lots of agents locally are thinking of pulling off both RM/Z – he understandably doesn't think that is a good idea. He did say his view was they should stick with Zoopla. So I believe that is his vote."
"I think they are all trying to eat the cake before it is cooked. Pattinson want off RM so maybe this is influencing Clive. Much better for us if they leave Z. Much less likely to go back. Should I have a go?"
"Yes. That is what prompted my correspondence with Caroline Pattinson. I made the point to Clive that they should take the low risk option. Anything else is trying to get the benefits of [Agents' Mutual] instantly and forgetting it will take us time to get traction. He ran through the scenario in Whitley Bay where these [sic] is a strong campaign for both. I said that risks either portal breaching the dam in the short term and agents then flooding back in an uncoordinated way. Easier to hold the line on 'one other portal' (especially if RM). I also said they should be careful about issuing a list of members to Zoopla. This is not needed to create a group deal. Just the numbers of offices is sufficient. Clive, Andrew Craig, Steve Henning and Mike Rogerson are seeing Caroline P tomorrow. I will forward the correspondence to you. In essence, they would be mad to come off RM and leave Pattinson on there. Better to come off Zoopla and render it useless and then market against Pattinson by saying they offer both RM and OTM. I will send Clive a follow up email later tonight."
"Hi Ian, As you know, we have 200 plus offices in NE. Jon Notley has had a number of post meeting discussions with Mike and has requested a list of NE members so that he can structure an offer. It would appear he needs this information to make progress. We will obviously need to obtain individual firm's agreement to providing such information."
"Dear Caroline I hope you are well. Clive Rook mentioned to me that you are meeting with him and others tomorrow to discuss Agents' Mutual and the progress being made in the North East. This is just to say that if, following that meeting, you are minded to explore membership options, I would be very happy to come to meet with you to discuss your requirements and try to meet them." (2) Ms Pattinson to Mr Springett: "
"Hi Caroline Thanks for this. I appreciate your position, of course. I am simply thinking that if all of the main agents in the North East were aligned, it would be easier for them to make courageous decisions about individual and, indeed, potentially all other portals." (4) Ms Pattinson to Mr Springett: "
"Hi Caroline Noted. However, this is no 'Property Penguin'." (6) Ms Pattinson to Mr Springett: "
"Hi Caroline Zoopla came to market with a valuation of over£940M (today£885M ). This was on a rating which implied an expectation by the stock market that their income and profitability will catch up with Rightmove's over the next three years. RM profit margin for 2013 was 74% on turnover of£140M . Z profit margin was 46% on turnover of£65M . Analysts expectations (until recently) were that RM income would reach£200M by 2017. NB A large part of this is expected to come from them extinguishing the historic discounts offered to multi-office firms now they are in a position to do so. As well as, of course, general fee increases (including the 'old rope' they sell as Additional Products). So by 2017, the two portals could be taking£400M + out of the industry – and possibly be a direct competitor to agents in the UK as they already are in Overseas Property. We could never have raised the cash to acquire one of the portals – not least because the whole point is to operate the portal at cost for agents. However, agents (for now) have control over the 'crown jewels' – the listings and the listing fees – and the ability to add serious local marketing weight to the central advertising we will do. With support from the majority of independent agents, we will have all the firepower RM has – and they will be forced to amend their behavior. RM started the year valued at£2.8Bn . Today it is at£2.1Bn . Our plan is to put them right back in their box as a supplier to agents rather than their master."
"We had a good AM meeting in our patch and Ian Springett did us proud in coming down from London and doing a great presentation. He really motivated some of the fence sitters and the main talk was of dropping both (won't happen) or dropping Rightmove."
"Good morning Ian, Two quick questions 1. We have a dinner engagement with the MD of Rightmove tomorrow night down here in Barnstaple fixed up last Friday. Co-incidence after our Devon meeting where we talked of dropping Rightmove?? Could be that I spoke to a USA broker for an hour on Tuesday about the possibilities of Rightmove losing some areas. Any message you want me to give? 2. The North Devon group talked of dropping both portals immediately. If we did this could we still be on one of the others elsewhere. Like Rightmove in Somerset / Cornwall areas. I appreciate it would have to be one or the other of the two unilaterally in the other areas." (2) Mr Springett responded on the same day: "
"The Maidstone based agents who have signed up to AM resolved to meet again 12pm Wednesday 19th November, you're welcome to attend. At the meeting I very much expect us to determine which portal to retain although in the interim period a steering group has been set up to organise a promotional campaign for our group with a starting budget of c£5,000 pcm to cover our patch, envisaged for at least six months. All agents attending recognised the power of unity and further recognised the retained portals power could be diminished by reducing the 'add ons' used. What occurs to me is that AM is a tool for estate agents to take back their destiny yet, so far, there have only been isolated groups of smaller independent agents dotted around the country getting together to discuss their futures. There has been a resounding lack of input and information from the larger, usually founder member agents, whose input into these discussions might prove to be influential. None the less we progress in our own little way. Estate agency at our level is pretty insular in that it is a local affair, mostly having a regional radius/catchment area, perhaps not experienced by the likes of yourselves, Savills and Strutt's. My fear is that if half the agents on our patch retain one portal and the other half retain the remaining portal we simply dilute the effectiveness of On The Market to no gain to anyone who has signed up to them. Surely the endgame is ultimately to take the retained agent to task with a view to coming off that portal too? In my view this needs a coordinated regional approach yet the big boys, and I include KF, Savills and Strutt's in that term, seem content to let us smaller fish flounder (pun intended). As estate agency at our level is usually regional it would actually make sense for all (say Kent-based) estate agents to retain one portal, and it wouldn't really matter if say Essex retained the other. Dilution by a split vote at a regional level can only be the end of OTM before it gets off the starting blocks. Our little group is 10 agents and only 22 offices yet we represent about 33% of the available property listings on our patch. Arun Estates have about 22% as do the other independents. Theinternet based agents and developers have about 11%, the same as the corporates of LSL/Countrywide. Can you imagine the damage to the rejected portal if we all came off at the same time, even at a regional level? It's possible that if we break ranks with the big boys above we will end up with a Prime Location situation all over again. The big boys loved PL yet ended up doing what us minions knew all along was the best course of action, and PL ultimately fell to acquisition. I guess what I'm saying is that input from the founder agents would be welcome, and some would say essential for the future of OTM. Maybe we should be discussing what promotion we should do ourselves other than what AM intend as it would seem to be to all our mutual benefit. There's no point in our group putting in full page ads in the local media promoting OTM only to find KF have done the same on the same week. We could pool our resources or at least coordinate a campaign. As an aside, I'm remarkably surprised at the lack of agents on-board in the Medway towns…Actually I think I know the reason why so few independents on-board in these areas is that the local rep just can't be everywhere all the time. It's in all of our interests to talk to anyone who is joined, or ought to consider joining. If you're aware of any similar groups like our own in and around your patch, I'd be pleased to at least have a chat with them." (2) Mr Flint commented as follows: "
"Here is an update on progress with the approach to OnTheMarket in the North Devon region, following a second meeting of our Marketing Group. The consensus is to keep Rightmove and give notice to Zoopla, and to that end Webbers has already given notice to terminate their contract at the end of November. The plan discussed is to defer loading properties to RM for say three days after they appear on everyone's own website and OTM. The aim is to have a basic RM subscription only with no premium listings etc, with a strategy to be in a position to resign from RM in 12 months. It has been agreed to carry out some marketing in the NDJ promoting OTM from December, with all of the agents logos to appear (and costs to be shared equally) and that no agent is to promote RM in our offices, or on any website or marketing, but to focus strongly and solely on OTM, to build profile."
"Background 1. Nearly everyone in our patch is in OTM (not in – YM RR KP Bridgefords Coast and C Red hot) 2. Everyone in [ sic ] prepared to work together to make it No 1 portal, to advertise together in leaflets, e mails, newspapers directories and common newspaper ads with OTM branding. All members to heavily promote to make No 1 and marginalise none [ sic ] members. Interesting opportunity at Alnwick and Hexham. 3. Nearly all members in our area have committed verbally to Z. (SY AC JF NC RPS FM Mark Small Ben Bailey ROGERSON, (very confident re Rickards, Dobsons) not yet sure re Bowes Mitchell and Groves, George White staying with RM to see how things pan out 4. Central Durham Teeside staying with RM but most wish to stay Z but can't persuade each other at the moment (Sunderland and Shields may be coming off both). 5. Coast. Mark Small done a big job among big membership and appears to have all except N Cooke on board. If all others go Z I estimate NC likely to follow. If he does not he can be marginalised. 6. A real chance here to marginalise none [ sic ] members Steve Henning advised last week he had heard corporates in NE really worried about OTM. 7. If what I have been told by others occurs, and if we stay Z, OTM and Z will be by far the dominant portals in our area. 8. Stenghts [ sic ]: 1. OTM should be clearly dominant as all members work hard to promote it to sellers and buyers 2. We can successfully attack none [ sic ] members? (business market share opportunity). 3. Leaving RM will save us£80,000 ? after 1 st June next year pa and slow / stop entry of Online Agents. 4. KP waiting to see site and wants a deal. Ian S will approach soon. Difficult to see how they can stay out? Corporates may join? 4. [ sic ] Will ask Z to support points of weakness with ads etc. 5. Should be easy to explain move away from RM (they have cluttered distracting ads with pop ups and intrusive questions which annoy / distract buyers. OTM property page is ONLY YOUR PROPERTY. (Honeymoon question?) 9. Weaknesses: isolated pockets of RM / OTM members and corporate strengths eg West Denton. NB Kingswood member and likely Z member are 3 rd after RMS and YM. Sarah Mains staying on RM but Low fell [ sic ] agents working hard to change mind or marginalise HEATON we need BM with Z. 10. RM contract and advice discussion. 11. Other considerations. 1. Their [ sic ] will be other developments some local and more national. 2. Zoopla injunction. 3. RM and Corporate attack. 4. Collective boycott illegal. 12. Decision and timing, our announcement will influence others. 10. [ sic ] Board minute record."
"…With OnTheMarket launching on 26th – which portal are you dropping? We had decided to drop Rightmove but am now not so certain." (2) Mr Abrahmsohn responded: "
"Dear Trevor Of course. I won't be able to look/comment until this evening but will email you then. In the meantime, I thought you might be interested in the attached draft report (not for publication) which shows OTM property stock property stock v Primelocation property stock in our 'Prime Country' and 'Prime London' areas. Outside London most members have chosen to stay with right move which has put us in second position in all price categories… However, in London the RM/Z vote is split which sadly leaves us still in third place. These numbers bear out the discussions we had during last year to the effect that the most efficient way to get swiftly to the number 2 position would be if members dropped Zoopla. You and your Fabric colleagues represent a big swing vote!" (2) Mr Abrahmsohn responded: "
" The suspected agreement(s) or concerted practice(s) Estate agents should act independently and should be free to choose which portals to list on. The CMA considers that the number and identity of portals they list on can be an important parameter of competition for estate agents. The CMA understands that one of the requirements of membership of Agents Mutual is that in order to list properties on its OnTheMarket.com portal, agents may list on a maximum of one other portal – known as the 'plus one' rule. If Agents Mutual's members were to meet and agree collectively either a) to list only on OnTheMarket.com to the exclusion of all other property portals or b) to list on the same portal in addition to OnTheMarket.com, the CMA would likely consider this to be an agreement or concerted practice that could constitute a breach of Competition Law. Although we do not have evidence that Agents Mutual has arranged or participated in any such meetings, or encouraged participation, we would be concerned if it were to be proven that Agents Mutual was encouraging its members to enter into potentially anti-competitive agreements. Other concerns with the rules of Agents Mutual We have received information that online only estate agents are prohibited from listing on OnTheMarket.com. Although, at present they have a choice of other portals on which to list their properties, the CMA may have concerns about their exclusion should OnTheMarket.com establish a position of market power – such that it is able to behave independently of the normal constraints imposed by competitors, suppliers and customers – in any market(s).
"Thank you for your letter dated27 March 2015 headed "
"Thank you for confirming that we will be entitled to the payment of our loan interest. As regards our future portal advertising I am sorry that I must advise that as a subsidiary company to the Connells Group it was always inevitable that we would appear on Zoopla and this is likely to take effect later this week. As such it is my understanding that we will fall foul of the OTM one other portal ruling and be no longer eligible to appear on your site. As you will recall, as an independent estate agency we were one of the first to support AM as we saw it as an opportunity to break the Rightmove/Zoopla dominance. I believe that OTM has a real battle moving forward as it really seems to be Zoopla and OTM which are battling for the register with Rightmove less affected. With the corporates in such an acquisitive mood this can only make your aims and intentions increasingly challenging. My understanding with regard to our loan notes is that we will fail to receive interest in future but they remain repayable at the expiration of the term. My sincere apologies for having to convey this news, and my best wishes to on the market for the future." (8) The "four party meeting"
"I think anything which encourages Simon [Embley, of LSL] to think we are going to get to the tipping point and knock Z over would be helpful – might just be in conversation if you are in his company at any point. I would think he is hedging his bets – much like the stock market – he does not know if we are going to forge ahead at Z's expense or they will recover at ours although he said he was less sceptical than before our meeting. The best deal he will get from us is by coming now."
"Confidentially, we have opened discussions with the big 3 corporate groups but, of course, there are lots of twists and complexities. However, the disposal of their ZPG shares would remove one of these. I hope the penny is finally dropping that the two monsters they have helped create and benefitted from financially are steadily eroding their core businesses and this will only accelerate unless the OTM alternative succeeds."
"Meeting notes of 21 st Jan 16 - David Livesey, Connells; Alison Platt, Countrywide; Ian Crabb, LSL Holdings. Meeting effectively 'convened'by DL. Relatively short notice. IS opened: big potential opportunity to combine AM existing membership strength with their strength to create the market leading portal. As a publicly quoted business, potential market cap could reach several £Bn - why not own it? IC queried the route map – how to advance the business to and beyond the tipping point. Would this work from an economic viewpoint? IS covered the switch of their 90,000 listings from Zoopla and the likely surge in agent membership. Our model works on conservative ARPA and still generates big surpluses. IS set out the route map to the ownership model needed. Disinvest elsewhere Enter contract with AM (inc OTM + 1) and invest in 0% loan notes with a multiple return at the end of the term contract. Include a 'conversion' clause in the event the Company moved to 'limited by shares'. Proposition two members: close membership, IPO (at say£500M ). Issue equal shares to current membership and authorise further issue for capital raising and to incentivise key agents. Each current member holding would have paper value of£100k after dilution of their stake to 60%. Some of the shares used to raise capital, others to meet conversion from Loan Notes, others to incentivise further key firms (ZPG partners). Further agents joining OTM are just customers. All members remain OTM + 1 and this gets us past tipping point 1 towards tipping point 2 where we are seen as strong enough for agents to begin withdrawing from Rightmove. Endgame – 15,000 branches at an avg monthly fee of say£1000 with no real need to list anywhere else.£118M income before any other revenue sources. Under any scenario, the members need to be protected and receive the elements of the proposition they bought into = sustainably reasonable and fixed listing fees, no internet-only. AP queried the desire of the ZPG partners to join. IS said conversations had taken place, with one interested in joining simply to support the principles of what we are currently doing and another looking for a financial incentive. None seem locked to ZPG. DL pushed dropping one other portal and AP supported, saying the market should decide and the best portal would win – they would provide us with extra stock to put us in the game. IS said there is no magic – RM is now the only portal with near 100% stock and matching income so is winning. Would not have entered the market on any other basis than agents backing and directing their stock via OTM + 1 rule. Still plenty of mileage in that and consistent with the 'most interesting scenario'. IS asked what success resulted from them supporting OTM looked like for them. DL said it would be really strong portals competing, with them potentially benefitting from an investment in one or more. DL asked what we would do if the three of them don't join. IS said we would carry on growing organically with the support of the small and medium firms which still represent the majority of the market. OTM + 1 would remain as it is key to reaching the No. 2 position as the first milestone. AP queried the strategy – internet denier/consumer wants internet only. IS said pure internet plays are simply parasites only viable because the portals allow them to operate alongside the main customer base of high street firms. Why allow margin to be eroded in this way and allow this business model to flourish at agents' expense. As the market currently operates, the portals win either way. AP asked how we value the business. IS said (1) create a business projection based on the 3 joining OTM + 1 which would show strong forward profit and cash generation; then (2) approach an investment bank for a view on IPO value. IS said we all probably new suitable investment houses – it was agreed that it should be done by AM to avoid hares running. All felt Close Brothers would be a credible source for this. The forward income worked just based on UK resi listing fees but there would also be substantial further revenue potential from Overseas, Commercial, and commercial partnerships provided these did not detract from the core purpose."
"The Competition and Markets Authority (CMA) is writing to estate agents to remind them that, when an estate agent makes a commercial decision about its choice of online property portals, the law requires that it makes that decision without colluding with estate agents that are its competitors. The CMA is taking this step after becoming aware that estate agents in some local areas may have made a collective decision to join the OnTheMarketPortal and, at the same time, to remove their business from other portals that compete with OnTheMarket. [38] The CMA has already been in contact with some agents and trade associations in this regard. However, given some evidence that such collusion may be happening between estate agents in more than one local area, we are issuing this open letter to all estate agents, advising them that this kind of conduct may break competition law and that agents engaging in it could therefore face significant fines. Separately, the CMA will be contacting individual estate agents it suspects may have been involved in this potentially anti-competitive collusion."
"The CMA has today published an open letter to agents about their obligations under competition law when choosing online property portals to advertise their properties. As you would expect, the Board and management team of Agents' Mutual has always been scrupulous in building a procompetitive business to seek appropriate legal advice and to share that advice as appropriate with its current and prospective agents. The guidance to agents given in the CMA's open letter accords entirely with the advice consistently given over time by OnTheMarket/Agents' Mutual to its current and prospective agents. We note that in the open letter from the CMA there is a specific statement that "
"I am writing to you as a matter of courtesy following the meeting between your client and the CMA on 11 May 201[6] to advise you that the CMA has received a complaint which relates amongst other things to the conduct of Agents Mutual. After careful consideration of the merits of opening a case in light of the CMA's Prioritisation Principles, the CMA has decided not to prioritise an investigation in relation to Agents Mutual's conduct as set out in that complaint at this time. By way of confirmation, the CMA's position is that it is not currently minded to open an investigation in respect of the rules of Agents Mutual underChapter I of the Competition Act 1998 or Article 101 TFEU on the grounds that it is not a current administrative priority for the CMA. In selecting which matters to pursue, the CMA considers in the round impact, strategic significance, risks and resources, and may also take account of other relevant factors…"
"1. By these proceedings, [Agents' Mutual] seeks to enforce [Gascoigne Halman's] compliance with the 'OOP Rule'. [Gascoigne Halman's] case, in short, is that the rule is void because estate agents have coordinated anti-competitively, through the vehicle of [Agents' Mutual], and in particular through the OOP Rule, to limit their use of portals and thereby " replace "
"The list in Article [101(1) TFEU] is intended to apply to all collusion between undertakings, whatever form it takes. There is continuity between the cases listed. The only essential thing is the distinction between independent conduct, which is allowed, and collusion, which is not, regardless of any distinction between types of collusion."
"[100] We begin with a consideration of the law: (1) Ever since the decision in Case 56/65, Société Technique Minière v Maschinenbau Ulm [1966] ECR 235 at 249, it has been clear that the words "object or effect" in Article 101(1) TFEU are to be read disjunctively. Where an agreement has as its object the restriction of competition, it is unnecessary to prove that it will produce anticompetitive effects: only if it is not clear that the object of an agreement is to restrict competition is it necessary to consider whether it might have the effect of doing so. (2) As Whish and Bailey note, what constitutes a restriction of competition by object remains a controversial topic, "a concept that, after more than 50 years of EU competition law, continues to be hotly debated"
"[48] It must be recalled that, to come within the prohibition laid down in [Article 101(1) TFEU], an agreement, a decision by an association of undertakings or a concerted practice must have "as [its] object or effect" the prevention, restriction or distortion of competition in the internal market. [49] In that regard, it is apparent from the Court's case law that certain types of coordination between undertakings reveal a sufficient degree of harm to competition that it may be found that there is no need to examine their effects… [50] That case law arises from the fact that certain types of coordination between undertakings can be regarded, by their very nature, as being harmful to the proper functioning of normal competition… [51] Consequently, it is established that certain collusive behaviour, such as that leading to horizontal price-fixing by cartels, may be considered so likely to have negative effects, in particular on the price, quantity or quality of the goods and services, that it may be considered redundant, for the purposes of applying [Article 101(1) TFEU], to prove that they have actual effects on the market…Experience shows that such behaviour leads to falls in production and price increases, resulting in poor allocation of resources to the detriment, in particular, of consumers. [52] Where the analysis of a type of coordination between undertakings does not reveal a sufficient degree of harm to competition , the effects of the coordination should, on the other hand, be considered and, for it to be caught by the prohibition, it is necessary to find that factors are present which show that competition has in fact been prevented, restricted or distorted to an appreciable extent… [53] According to the case law of the Court, in order to determine whether an agreement between undertakings or a decision by an association of undertakings reveals a sufficient degree of harm to competition that it may be considered a restriction of competition "by object" within the meaning of [Article 101(1) TFEU], regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms a part. When determining that context, it is also necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question … [54] In addition, although the parties' intention is not a necessary factor in determining whether an agreement between undertakings is restrictive, there is nothing prohibiting the competition authorities, the national courts or the Courts of the European Union from taking that factor into account… [55] In the present case, it must be noted that, when the General Court defined in the judgment under appeal the relevant legal criteria to be taken into account in order to ascertain whether there was, in the present case, a restriction of competition by "object" within the meaning of [Article 101(1) TFEU], it reasoned as follows, in paragraphs 124 and 125 of that judgment: "[124] According to the case law, the types of agreement covered by [Article 101(1)(a) to (e) TFEU] do not constitute an exhaustive list of prohibited collusion and, accordingly, the concept of infringement by object should not be given a strict interpretation… [125] In order to assess the anti-competitive nature of an agreement or a decision by an association of undertakings, regard must be had inter alia to the content of its provisions, its objectives and the economic and legal context of which it forms a part. In that regard, it is sufficient that the agreement or the decision of an association of undertakings has the potential to have a negative impact on competition. In other words, the agreement or decision must simply be capable in the particular case, having regard to the specific legal and economic context, of preventing, restricting or distorting competition within the common market. It is not necessary for there to be actual prevention, restriction or distortion of competition or a direct link between [that agreement or decision] and consumer prices. In addition, although the parties' intention is not a necessary factor in determining whether an agreement is restrictive, there is nothing prohibiting the Commission or the Community judicature from taking it into account…" [56] It must be held that, in so reasoning, the General Court in part failed to have regard to the case-law of the Court of Justice and, therefore, erred in law with regard to the definition of the relevant legal criteria in order to assess whether there was a restriction of competition by "object" within the meaning of [Article 101(1) TFEU]. [57] First, in paragraph 125 of the judgment under appeal, when the General Court defined the concept of the restriction of competition "by object" within the meaning of that provision, it did not refer to the settled case law of the Court of Justice mentioned in paragraphs 49 to 52 of the present judgment, thereby failing to have regard to the fact that the essential legal criterion for ascertaining whether coordination between undertakings involves such a restriction of competition "by object" is the finding that such coordination reveals in itself a sufficient degree of harm to competition. [58] Secondly, in the light of that case law, the General Court erred in finding, in paragraph 124 of the judgment under appeal, and then in paragraph 146 of that judgment, that the concept of restriction of competition by "object" must not be interpreted "restrictively"
"Market definition is a tool to identify and define the boundaries of competition between firms. It serves to establish the framework within which competition policy is applied by the Commission. The main purpose of market definition is to identify in a systematic way the competitive constraints that the undertakings involve face. The objective of defining a market in both its product and geographic dimension is to identify those actual competitors of the undertakings involved that are capable of constraining those undertakings' behaviour and of preventing them from behaving independently of effective competitive pressure." (ii) Often, it is only necessary to define a single market and to consider the (anti-) competitive effects of an alleged restriction in that market. (iii) However, the present case involves two or more relevant markets (property portals and estate agents), at least one of which (the property portals market) is "two-sided"
"[89] It is apparent from the case-law of the Court of Justice that if a given operation or activity is not covered by the prohibition rule laid down in Article [101(1) TFEU], owing to its neutrality or positive effect in terms of competition, a restriction of the commercial autonomy of one or more of the participants in that operation or activity is not covered by that prohibition rule either if that restriction is objectively necessary to the implementation of that operation or that activity and proportionate to the objectives of one or the other… [90] Where it is not possible to dissociate such a restriction from the main operation or activity without jeopardising its existence and aims, it is necessary to examine the compatibility of that restriction with [Article 101 TFEU] in conjunction with the compatibility of the main operation or activity to which it is ancillary, even though, taken in isolation, such a restriction may appear on the face of it to be covered by the prohibition rule in Article [101(1) TFEU]. [91] Where it is a matter of determining whether an anti-competitive restriction can escape the prohibition laid down in [Article 101(1) TFEU] because it is ancillary to a main operation that is not anti-competitive in nature, it is necessary to inquire whether that operation would be impossible to carry out in the absence of the restriction in question. Contrary to what the appellants claim, the fact that that operation is simply more difficult to implement or even less profitable without the restriction concerned cannot be deemed to give that restriction the 'objective necessity' required in order for it to be classified as ancillary. Such an interpretation would effectively extend that concept to restrictions which are not strictly indispensible to the implementation of the main operation. Such an outcome would undermine the effectiveness of the prohibition laid down in [Article 101(1) TFEU]."
"[28] …the national court seeks to ascertain whether a provision in the statutes of a co-operative purchasing association, the effect of which is to forbid its members to participate in other forms of organized co-operation which are in direct competition with it, is caught by the prohibition in [Article 101(1) TFEU]. … [30] A co-operative purchasing association is a voluntary association of persons established in order to pursue common commercial objectives. [31] The compatibility of the statutes of such an association with the Community rules on competition cannot be assessed in the abstract. It will depend on the particular clauses in the statutes and the economic conditions prevailing on the markets concerned. [32] In a market where product prices vary according to the volume of orders, the activities of co-operative purchasing associations may, depending on the size of their membership, constitute a significant counterweight to the contractual power of large producers and make way for more effective competition. [33] Where some members of two competing co-operative purchasing associations belong to both at the same time, the result is to make each association less capable of pursuing its objectives for the benefit of the rest of its members, especially where the members concerned, as in the case in point, are themselves co-operative associations with a large number of individual members. [34] It follows that such dual membership would jeopardise both the proper functioning of the co-operative and its contractual power in relation to producers. Prohibition of dual membership does not, therefore, necessarily constitute a restriction of competition within the meaning of Article [101(1) TFEU] and may even have beneficial effects on competition. [35] Nevertheless, a provision in the statutes of a co-operative purchasing association, restricting the opportunity for members to join other types of competing co-operatives and thus discouraging them from obtaining supplies elsewhere, may have adverse effects on competition. So, in order to escape the prohibition laid down in [Article 101(1) TFEU], the restrictions imposed on members by the statutes of co-operative purchasing associations must be limited to what is necessary to ensure that the co-operative functions properly and maintains its contractual power in relation to producers."
"By limiting themselves in respect of both the number and choice of portals, AM's Members have undertaken to each other both (i) to restrict their total output on the market for estate agency services and (ii) to restrict themselves as regards a significant parameter of competition in that market."
"[12] …it should be recalled that for the agreement at issue to be caught by the prohibition contained in [Article 101(1) TFEU] it must have 'as its object or effect the prevention, restriction or distortion of competition within the Common Market'. The Co-operative's rules, which require its members to purchase from the Co-operative all the rennet and colouring agents for cheese which they need, and which reinforce that obligation by stipulating the payment of a not inconsiderable sum in the event of resignation or expulsion, have clearly as their object to prevent members from obtaining supplies from other suppliers of rennet or colouring agents or from making them themselves should those alternatives offer advantages from the point of view of quality or price. Since, according to information which has not been challenged, the members now account for more than 90 per cent of Dutch cheese output, those provisions in addition contribute to maintaining the present situation, in which the Co-operative is virtually the only supplier of rennet on the Dutch market. [13] Those provisions are thus of such a nature as to prevent competition , at the level of the supply of rennet and colouring agents for cheese, between producers holding a large part of the Community market in cheese, and also tend to rule out the possibility of creating a competitive situation on the whole of the Dutch market in these ancillary substances which are indispensable in the making of cheese. In the circumstances, there is no need to examine the question whether other factors help to maintain the Co-operative's dominant position on the relevant market and whether such factors are sufficient to consolidate that position, even in the absence of the aforesaid provisions."
"[32] The matters brought to the Court's attention show that the BIDS arrangements are intended to improve the overall profitability of undertakings supplying more than 90 per cent of the beef and veal processing services on the Irish market by enabling them to approach, or even attain, their minimum efficient scale. In order to do so, those arrangements pursue two main objectives: first, to increase the degree of concentration in the sector concerned by reducing significantly the number of undertakings supplying processing services and, secondly, to eliminate almost 75 per cent of excess production capacity. [33] The BIDS arrangements are intended therefore, essentially, to enable several undertakings to implement a common policy which has as its object the encouragement of some of them to withdraw from the market and the reduction, as a consequence, of the overcapacity which affects their profitability by preventing them from achieving economies of scale. [34] That type of arrangement conflicts patently with the concept inherent in the [Treaty] provisions relating to competition , according to which each economic operator must determine independently the policy which it intends to adopt on the Common Market. [Article 101(1) TFEU] is intended to prohibit any form of coordination which deliberately substitutes practical cooperation between undertakings for the risks of competition."
"For most vertical restraints, competition concerns can only arise if there is insufficient competition at one or more levels of trade, that is, if there is some degree of market power at the level of the supplier or buyer, or at both levels. Vertical restraints are generally less harmful than horizontal retraints and may provide substantial scope for efficiencies."
"During his oral evidence to the Tribunal, Mr Parker very visibly sought to downplay the significance of the empirical analysis, describing it as "by no means the only item of evidence that I think I bring to bear", and referring to it as coming "right at the end" of the other "evidence" which he relied on (consisting of his theory that RM's pricing power would be strengthened, the OFT ZPG merger decision…and various third party comments)…However, the empirical analysis is the only means by which Mr Parker purports to substantiate his allegation that agents have experienced higher prices by reasons of [Agents' Mutual's] entry. His theoretical predictions cannot do this. Nor can the OFT decision, which was similarly a prediction as to the future. Nor can third party statements prepared for other reasons, which refer generally to the respective strength of RM and ZPG, but do not specifically address the question of pricing power. GH's effects case therefore stands or falls with Mr Parker's empirical analysis."
"…the empirical analysis of 'cost per lead' is based on "only six [data] points [from which] it is very difficult to draw any conclusions (see the question of Mr Landers, Transcript, Day 8, p12, ll.9-10). It does not meet the conventional standards of statistical significance usually employed by economists and embodied in the European Commission's Best Practice Guidelines …"
"Many agents were concerned about being beholden to Rightmove and, to a lesser extent, Zoopla, including in respect of the annual price increases"
"The OFT considered that the merger is likely to have a pro-competitive impact by creating a portal that can rival Rightmove. At present, Rightmove is by far the biggest portal in terms of exposure to house-hunters. Estate agents have little choice but to list on Rightmove, allowing it to increase prices significantly in recent years. The merged portal will significantly reduce the difference in quality between the parties and Rightmove, which the OFT considers is likely to lead to a stronger constraint on Rightmove's pricing."
"we cannot move forwards or certainly you won't be moving forward with me involved unless we can get to a sensible outcome around that question."
"…Their plan is based on most agents initially dropping Zoopla to go with them…". (ii) Paragraph 76(4)(iv): "…In our area this is likely to result in the demise of Zoopla…". (iii) Paragraph 76(5)(iv): "…I would therefore propose for your consideration the following – every agent in the North East drops Rightmove…". (iv) Paragraph 76(5)(v): "…We all know Keith Pattinson's view on Rightmove and I think following conversations with Clive Rook Clive may prefer the Zoopla option…" (v) Paragraph 76(7): "…see if we can get critical mass of support to join up on launch and drop the other portals (except RM? To start with)…". (vi) Paragraph 86(1): "…We are favouring Zoopla as is Clive Rook in the NE". (vii) Paragraph 86(3): "…We will have to see what our agents group view is when we report back to them…". (viii) Paragraph 86(4): "
"…Agents' Mutual will require us to drop one portal and for us it's a no-brainer. Pity really as [Mr Notley] is a nice chap…".
"Zoopla are coming to see me next week with a view to making a presentation in September to NE owners of 150 – 180 offices". (xii) Paragraph 91(3): "
"…in order that we could have a few discreet discussions with some of them in order to gauge the general consensus on which portal they are likely to retain…". (xiv) Paragraph 94(2): "
"On the assumption that Rightmove will be the preferred second portal of choice unless Zoopla can come up with an exceptional offer…". (xvi) Paragraph 94(11): "…Personally, I would ditch Rightmove." (xvii) Paragraph 96: "…the agents present were all prepared to sign up to the Zoopla deal…". (xviii) Paragraph 98: "…and hopefully all agree to which portals we will all come off as a group…". (xix) Paragraph 100: "
"…the main talk was of dropping both (won't happen) or dropping Rightmove". (xxi) Paragraph 106(1): "
"At the meeting I very much expect us to determine which portal to retain…". (xxiii) Paragraph 108: "
"Although a number of authorities on the application of the doctrine of severance cannot easily be reconciled, it is submitted that two underlying principles have throughout guided the courts. First, the courts will not make a new contract for the parties, whether by rewriting the existing contract, or by basically altering its nature; secondly, the courts will not sever the unenforceable parts of a contract unless it accords with public policy to do so."