Companies in UK fined over £775,000 in CMA investigation into advertising of agents’ fees

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The settling parties consist of the association, Three Counties Estate Agents Limited (Three Counties); 3 of its members, namely Castles Property Services Limited (Castles), Hamptons Estates Limited (Hamptons International, and its parent companies Countrywide plc and Countrywide Group plc), and Waterfords (Estate Agents) Limited (Waterfords); and the publisher of the ‘Surrey & Hants Star Courier’, Trinity Mirror Southern Limited (Trinity Mirror Southern, and its parent company Trinity Mirror plc).

The penalties include a settlement discount of 10% to reflect the resource savings to the CMA generated by the parties’ admissions and agreement to co-operate.

Today’s settlement follows a statement of objections issued in December 2014. Following receipt of the statement of objections, the companies have now admitted that, at various times between July 2005 and January 2014:

  • Castles, Hamptons International and Waterfords, each being a member of Three Counties, entered into an agreement which prevented members of the association (including themselves) from advertising their fees or discounts in the local newspaper, the ‘Surrey & Hants Star Courier’.
  • Waterfords and Hamptons International extended the scope of this arrangement, with the co-operation of Trinity Mirror Southern, the publisher of the ‘Surrey & Hants Star Courier’, to prevent any agents (whether members or non-members of the association) from advertising their fees or discounts in this newspaper.
  • Three Counties’ membership rules prohibited the association’s members from advertising their fees or discounts in the ‘Surrey & Hants Star Courier’.

The CMA had launched the investigation over concerns that these arrangements had the object of reducing the competitive pressure on estate and lettings agents’ fees in the local area in and around Fleet in Hampshire. In addition, the restrictions may have made it harder for potential competitors to enter the market by using the level of their fees to attract new customers. The CMA alleged that these practices potentially limited consumers’ choice and obstructed their ability to compare prices and assess value for money.

Following the companies’ admissions, the CMA intends to issue an infringement decision around the end of April 2015. The CMA welcomes the parties’ admissions and co-operation throughout its investigation, which is likely to allow the CMA to complete its investigation within 16 months.

Ann Pope, CMA Senior Director of Anti-trust Enforcement, said:

These companies have admitted to making arrangements which aimed to reduce competition on fees and could have made it harder for new and innovative businesses to compete. The parties have also agreed to pay significant fines.

This case again demonstrates the CMA will take action in local markets as well as big national ones. It also shows that, where infringements take place within the context of trade associations, both the members of the association and the association itself can be found to have breached the law. This can result in severe financial penalties for the members, even where the association itself has limited funds.

The CMA has received complaints of potentially similar conduct concerning alliances of estate and lettings agents and local newspapers in other geographic locations across the UK. This may result in further investigations into similar restrictions, regardless of the size of company involved, particularly if they take no steps to remove such restrictions in light of the present investigation.

Advice for trade associations on complying with competition law is available on GOV.UK.

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