LONDON - Last month, after billionaires outbid billionaires in New York's contemporary art auctions, something became immediately clear: Christie's had just clobbered Sotheby's with a gavel.
Over four days, Christie's sales totalled US$1.7 billion (S$2.3 billion), its biggest week ever.
On one of those evenings, frantic bidding inside its Rockefeller Centre sales room enabled the auction house to sell US$706 million of art spanning the 20th century in less than two hours. An anonymous bidderput down US$179.4 million for Pablo Picasso's Les Femmes d'Alger, smashing the record for the most expensive work sold at an auction.
In contrast, Sotheby's moved just US$890 million of art in two weeks - just over half of Christie's tally - underscoring just how far it had fallen behind its rival.
Together, Sotheby's and Christie's control 42 per cent of the world's art auction market. The houses have one of the longest rivalries in business history going back to when they were established in the 18th century.
And there has been some scandal, too.
In the 1990s, the US Justice Department charged them with colluding to fix sales commissions. The houses eventually paid a total of US$512 million to settle claims by buyers and sellers, who said they were cheated.
The competition has become cut-throat: There has simply never been so much money at stake. Sales of art worldwide surged last year to an all-time high of US$57 billion, according to The European Fine Art Foundation.
Both auction houses also saw record sales - US$7.9 billion for Christie's (privately owned by French billionaire Francois Pinault) and US$6.7 billion for Sotheby's. Because Sotheby's is publicly owned, however, its missteps are harder to hide. Profit fell 9 per cent to US$117.8 million because of increased expenses.
Sotheby's has also endured a bruising proxy battle led by hedge fund manager Daniel Loeb of Third Point, who accused the company of being "asleep at the switch" and falling behind Christie's in Asia and online.
For all Mr Loeb's bluster, he highlighted one of the biggest problems facing New York-based Sotheby's and London-based Christie's. In the hunt to capture market share, they often tank their own commissions.
"Sotheby's will think, 'If we don't do it, Christie's will,' and vice-versa," said Mr Philip Hoffman, an ex-Christie's executive who now runs the Fine Art Fund, an investment group in London.
It does not help that it is a seller's market, one in which collectors play the houses against each other for the best deal.
In 2013, when newsprint magnate Peter Brant decided to sell Jeff Koons' Balloon Dog (Orange), he shopped the 1.2m-high stainless steel sculpture to both, hoping the sale would fetch as much as US$75 million, according to people familiar with the matter.
Christie's made the winning pitch, they said, by offering to forgo most of its sales commission paid by the buyer.
The piece went for US$58.4 million, the highest price ever for a living artist.