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A litigation funding arm of US hedge fund Elliott is financing a planned class-action lawsuit against Rightmove over claims the property website levies “excessive and unfair” charges on UK estate agents.
Innsworth Advisors, owned and backed by funds managed by Elliott, said it was financing an “imminent” legal action against the FTSE 100 property listings site.
Claimants led by Jeremy Newman, a former panel member at the Competition and Markets Authority, allege that Rightmove has abused a dominant market position to overcharge estate agents for listing properties on the popular portal. They are demanding £1bn in damages.
Rightmove, which was founded in 2000 by four corporate estate agencies and floated six years later, has become central to Britain’s residential sales and lettings markets.
About 1mn properties are advertised on the platform each month. Consumers spent 16.4bn minutes on the platform in 2024, according to its most recent annual report.
However, the threatened legal action is the latest challenge for Rightmove, which warned last week that its profit growth was set to slow as it increased investment in artificial intelligence. Last year, it successfully fought off a takeover approach from Rupert Murdoch’s REA.
Rightmove shares were down 1.1 per cent by early afternoon in London on Thursday to 557.4p, bringing losses for the year to 14 per cent.
Newman claimed in a statement that estate agents “have had to absorb consistent, excessive price increases” by Rightmove, allowing the company to generate the widest profit margins in the FTSE 100.
Rightmove confirmed it had “received notice of a potential claim”. It added in a statement on Thursday: “We’re confident in the value we provide to our partners. Further updates will be provided as appropriate.”
Analysts at Jefferies said in a note that “discontent leading to calls for regulatory intervention is nothing new for Rightmove”, noting that estate agents had previously petitioned for the CMA to launch an investigation.
“While such actions have come to nothing, this latest development looks serious,” partly given the involvement of Innsworth, the Jefferies analysts added.
Estate agencies are to be represented in the case on an “opt-out” basis, meaning they will be included automatically without needing to take any action.
The class action, due to be filed in the Competition Appeal Tribunal (CAT), comes at a time of considerable uncertainty for the system that allows such cases to be brought over alleged breaches of competition law.
A wave of lawsuits has been launched under legislation drawn up a decade ago to allow “opt-out” claims, but cases have been bogged down by protracted argument over process and funders’ financial returns have disappointed.
Ian Garrard, managing director of Innsworth, said of the Rightmove case: “As a result of Innsworth’s funding — and at a time of considerable uncertainty for the opt-out regime — businesses within the class will not have to pay a penny towards the claim.”
Innsworth was involved in an unusual public spat this year in a case involving Mastercard.
The CAT this year approved a £200mn settlement between Mastercard and former financial ombudsman Walter Merricks, who brought a class-action claim on behalf of about 46mn consumers.
The sum was a fraction of the £14bn the claimants had sought, and Innsworth said he should never have agreed to the deal.
While payouts from UK class-action cases have widely been regarded as inadequate for claimants, those bringing them secured an important breakthrough last month in a claim against Apple.
The CAT found that the tech giant levied “excessive and unfair” charges on software downloaded from its App Store. Apple said it would appeal.