The Competition Commission found that Private Property and Property24 impede competition and imposed strict new conditions on these property classifieds sites.
These restrictions formed part of the Competition Commission’s Online Intermediation Platforms Market Inquiry Report, released Monday.
The Competition Commission said Property24 and Private Property are the dominant platforms in South Africa’s online property classifieds sector.
Private Property is uniquely placed as it is a partnership with large national estate agencies through the Estate Agency Property Portal Company (EAPPC) facilitated by the industry association, Rebosa.
As a result, Private Property has been able to secure and lock in most of the listings.
The Competition Commission said property classifieds have many features that hinder platforms other than the two market leaders from securing listings.
- Estate agents use listing engine software to manage their listings and feed them onto their own websites and those of property classifieds. Property24 and Private Property provide syndication software to estate agents listing on their platforms.
- PropData is the largest independent supplier of syndication software to estate agents. Smaller syndication software providers feed out to all platforms but not PropData. The result is that 70% of estate agents wishing to list on alternative classified platforms face considerable practical barriers.
- The two leading property classifieds have reinforced their position in syndication software by charging a monthly R500 for feed-in from external syndication software. The fee impedes competition at a syndication software level.
- Estate agents typically have a budget for marketing and promotion and look to optimise that budget. Property24 and Private Property have sought to lock in this expenditure through multi-year contracts, limiting opportunities for competing platforms to contest it.
- Property24 and Private Property exercise extensive price discrimination based on the volume of listings an agency or dealer brings. This discriminates against smaller agents and dealers.
The Competition Commission found that these features from Property24 and Private Property impede competition.
New Competition Commission conditions
To address these distortions, Property24, Private Property and PropData must provide interoperability at no fee for estate agents to feed listings to other platforms.
Property24 and Private Property must also cease charging for incoming listings and put an end to multi-year contracts with large agencies.
Rebosa has also been instructed to cease to support Private Property as the preferred platform for the industry.
An application will be made to the Competition Tribunal for the national agencies to divest their shareholding in Private Property.
To address the discrimination in listing and promotion fees, the property platforms must substantially reduce their prices to smaller agents and dealers to a level closer to that of larger partners.
Property24 must introduce a Small Independent Business Package (SIBP) priced at an average per lead or listing level within 15% of the average of all other business users, reducing to 10% later.
Property24 must also introduce a free historically disadvantaged persons (HDP) programme.
It must provide personalised training, including site design and support, branded listings, five value-added services per month, and access to the market intelligence report.
New HDP agents must also receive a 12-month free standard listing subscription.