Rightmove has disclosed that it expects to incur £2.3 million in legal costs this year relating to a class action lawsuit alleging anti-competitive behaviour, according to its latest half-year financial results.
The property portal’s operating costs increased by 17% to £77.7 million, up from £66.3 million in the previous period. The figure includes £10.4 million of underlying cost increases and £2.3 million in legal and professional fees directly related to the proposed claim, partially offset by £1.3 million in lower share-based incentive charges.
£1.5 billion competition claim
The legal action, valued at £1.5 billion, has been brought by Jeremy Newman, a former Competition and Markets Authority panel member. Newman has secured support from a significant number of estate agencies for the initiative, which alleges that Rightmove abused its dominant position in the online property portal market by charging excessive and unfair fees to estate agents.
The Competition Appeal Tribunal has scheduled a hearing for 2nd and 3rd November this year. Rightmove was required to submit its response to the claim by this week.
Market implications
The legal challenge comes at a time when UK property transactions are taking longer to complete, potentially increasing pressure on estate agents’ operational costs. The outcome of the case could have significant implications for the UK property market structure, particularly as the housing market shows signs of stabilisation.
In a statement, Rightmove said it is “confident in the value we provide to our partners and consumers, who are at the core of our business solutions and digital platform.” The company described itself as “one of the most efficient parts of the UK housing market” and stated that the claim is “without merit,” adding that it will “defend it vigorously.”
The legal costs represent a material expense for the portal operator and could impact profitability in the current financial year, depending on the duration and complexity of the proceedings.
