Competition warnings over OnTheMarket were pretty much inevitable
Anyone with even a passing interest in technology and its history could have predicted this one: just as the Luddites were eventually overwhelmed by power looms, online property portal OnTheMarket was destined to stumble.
And lo, yesterday it came to pass: the Competition and Markets Authority (CMA) effectively took a sledgehammer to the site’s business model by warning online property portals which prevent those listing homes on them from also listing on rival sites that they could be breaching competition law.
To explain: for most of us they are the providers of hours of property porn fun – but beneath the double glazing and chandeliers, a war has been brewing. OnTheMarket was launched at the beginning of last year by a group of estate agents bent on toppling the might of Zoopla and Rightmove, who between them have about 85 per cent of the market.
One of the founding principles behind it was that any agent wishing to list properties on OnTheMarket would have to choose between either one of its rivals – meaning either Zoopla or Rightmove was going to lose out.
In a statement yesterday, the CMA said the sites on which homes are listed are “an important aspect of competition between estate agents", concluding that: “The choice of portal must be decided independently and not agreed with competitors.”
With an estimated 6,000 estate agents using the service, compared with Zoopla’s 16,600 and Rightmove’s 19,700, less than 18 months after its launch there were already reports OnTheMarket’s star was beginning to fade. Last week the FT reported agents were looking to ditch it, with one property consultant suggesting he was in contact with more than 200 estate agents who wanted out.
It is hard to avoid drawing parallels with black cab drivers’ reaction to Uber: rather than innovating, the cabbies chose the Luddite approach, complaining vociferously, launching a vicious Twitter campaign and lobbying for Transport for London to introduce onerous regulations.
Yesterday’s warning from the CMA may as well have been a warning to anyone reacting to advances in technology with denial and bullying tactics: protectionism doesn’t work. Innovation will always win out.