Rightmove is set to face a possible legal challenge into its hiking of fees.
Ian Wilson, CEO of The Property Franchise Group – one of Rightmove’s biggest customers – is instructing its lawyers Cubism Law (www.cubismlaw.com) to refer Rightmove to the Competition and Markets Authority for alleged abuse of a dominant market position.
The decision follows a meeting he had with Rightmove on Tuesday, when next year’s rate rises were discussed.
Wilson said: “I told Rightmove that it should be reducing its rates, because it delivered fewer leads in 2018 than 2017.
“I took one of our franchisees to the meeting, because franchisees have criticised me in the past for not being robust enough with Rightmove.
“The franchisee trades two of our brands, Martin & Co and CJ Hole, across two towns. He is on all three portals and was able to prove that Rightmove delivers the most expensive leads.
“Their response was that it could raise rates ‘because we’re worth it’.
“The franchisee walked out of the meeting.”
Wilson said he had told Rightmove at the meeting that they would be hearing from his lawyer, and that it was illegal for a company to abuse a dominant market position to raise rates when its cost base had not gone up.
The current TPFG Group contract with Rightmove runs out at the end of this year, and Wilson said that he will not be renewing it.
Individual franchisees, who are their own separate business entities, make their own decisions.
However, Wilson said he will also be advising them that depending on the local market, a combination of OnTheMarket, Zoopla and pay-per-click would represent better value than continuing with a Rightmove subscription.
Wilson said: “If a business owner is bullied and cajoled by a supplier which has more than a 30% market share (and Rightmove claims in its own promotional material it has 90% market share) into agreeing to price rises which the supplier cannot justify in terms of increased costs, or extra value for that customer, or the customer is forced to buy products that they do not want or use, then there is a case for the CMA to investigate.
“The CMA can direct that the supplier reduces prices and there may be a basis for customers to bring a claim for backdated damages. Our lawyers are already handling three cases, and have told me that the CMA is currently particularly interested in online suppliers.”
A spokesperson for Rightmove yesterday evening said they did not know of the possible legal challenge, but said: “We’re currently completing the retirement of our legacy Gold and Premium packages and replacing them with the current three packages: Essential, Enhanced and Optimiser.”