UK's Rightmove faces potential $1.34 billion lawsuit over 'unfair' estate agent fees

(Reuters) -Britain's biggest property listing portal Rightmove could be slapped with a 1 billion pound ($1.34 billion) legal claim from estate agents alleging that the company was charging "excessive and unfair fees" for posting properties.

The imminent legal action announced on Thursday is being led by Jeremy Newman, a former panel member of Britain's antitrust watchdog, and will seek to represent thousands of estate agents unless they opt out.

Rightmove acknowledged receiving the notice of the potential claim, and said "We're confident in the value we provide to our partners", but did not offer further details.

Its shares fell as much as 3.4%, and were down 1.2% at 1251 GMT.

"My case will seek to return the overpaid fees to estate agents across the country and to rebalance the relationship between Rightmove and the estate agents that use its online property portal, Newman said in a statement.

The possible action comes days after Rightmove's shares tumbled on a warning that its profit growth would slow next year as the company steps up investments, especially in artificial intelligence, to bolster operations and draw buyers.

While the UK property sector has seen some revival in buyer interest, inflationary pressures and broader economic uncertainty continue to dampen consumer sentiment ahead of an expected tax-hiking government budget later this month.

Rightmove earlier this year reported that its platform represented over 80% of the total time buyers spent on British property portals last year, amounting to approximately 16.4 billion minutes.

Scott+Scott UK is representing Newman, and Innsworth Capital is funding the claim. Other team members include Kieron Beal KC of Blackstone Chambers, and Kairos Economics.

($1 = 0.7451 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Vijay Kishore)