Government shows it doesn’t understand Internet shopping

Hundreds of thousands of Internet shoppers are disappointed this week because Tesco has had to take down its online house sales section. It may sound daft, but people do go “shopping” for the biggest purchase in their life – a house – online. Internet estate agency is big business.

However, there are (would you believe!) rules about being an estate agent. And it seems the Office of Fair Trading reckons Tesco is breaking those rules. Now call me an old cynic if you like, but Estate Agency is not one of those professions that people think is bound by rules. Indeed, surveys have consistently placed estate agent as one of the least respectable professions.

I haven’t sold a house in 11 years, so it may be different now, but all they did was write some details of my house (which I could have done more quickly, more accurately and with better sales copy). Then they took this inadequate information and mailed it to a list of people, most of whom didn’t want the details. They also put a picture in the window of their shop and then waited for people to walk in. I was charged nearly £6,000 for this “service”.

Tesco, on the other hand, was pushing the properties on their site to millions of targeted potential purchasers for a mere £199. And that, apparently, makes them an estate agent. Clearly, Tesco was doing the wrong thing – after all, it was using some of the best marketing brains in Britain, it was charging an appropriate price, it was providing high levels of customer service. Obviously that’s all wrong for an estate agent. The “rules” must mean you can’t do all that good stuff.

So, Tesco’s online shop for houses has been taken away. But – and Tesco probably wouldn’t do this for reputational purposes – all you have to do is set up the business outside the UK. Then you can sell the houses online but not have to abide by the “rules” from the UK Government.

Governments around the world are busy trying to make Internet retailers abide by their local laws and regulations. But savvy online retailers circumvent them by establishing their business outside the jurisdiction of the country. This current battle between Tesco and the OFT is just another example of the fact that business legislation the world over was written pre-Internet and is no longer suitable for the way we do things any more. Governments need to understand that.

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