A legal claim estimated at £1bn is in the works against property portal Rightmove, accusing the company of charging thousands of UK estate agents excessive and unfair prices to list properties.
The legal action, led by former Competition and Markets Authority (CMA) panel member Jeremy Newman, along with a team of lawyers at Scott+Scott UK and backed by litigation funder Innsworth Capital, argues Rightmove abused its dominant market position.
The allegations highlight Rightmove’s high profitability, citing its own 2024 accounts, which show a profit margin of around 70 per cent, positioning it as the most profitable company in the FTSE 100.
However, it is suggested that this margin is a result of the company abusing its dominant market position.
Newman, who was also the former managing partner of BDO, said: “Rightmove knows that, due to its first-mover status, its product is considered a ‘must-have’ for estate agents.”
“It exploits its dominance of the online property portal market in the UK to charge excessively and unfairly high subscription fees, both at face value and when compared with its competitors. Estate agents have had to absorb consistent, excessive price increases on a regular basis,” he added.
The legal action is still in its infancy, with a letter before action sent to Rightmove’s legal team.
The next step will be to launch a claim to the Competition Appeal Tribunal (CAT), which requires a certification hearing before any moves towards a trial can be made.
Rightmove issued a comment via RNS on Thursday morning on the matter, stating, “Rightmove notes press articles relating to a potential claim against Rightmove. Rightmove has received notice of a potential claim. We’re confident in the value we provide to our partners. Further updates will be provided as appropriate.”
Focus on class action regime
Ian Garrard, managing director of Innsworth Advisors, said that this action “is about levelling the playing field for businesses up and down the country, deterring anti-competitive behaviour and correcting the imbalance between big and small in the property sector.”
“Without the opt-out collective actions regime, it would be much harder – or even impossible – for SMEs to seek redress for anti-competitive behaviour,” he added.
This comes as third-party litigation funding is under increasing scrutiny. In August, the Department for Business and Trade called for evidence on the opt-out collective actions regime. And in October, the Adam Smith Institute (ASI) warned that the expansion of class action lawsuits in the UK was undermining trust in businesses as well as the legal environment.