The Competition and Markets Authority has raised concerns over eBay’s proposed sale of Gumtree to Shpock.
Austria’s Adevinta, parent company of online classified sales platform Shpock, is lining up a merger purchase of eBay Classified Group, parent company of Gumtree, from eBay.
A Phase 1 investigation found the £6.5 billion deal could lead to higher prices and less choice for consumers.
With the sale to Adevinta, eBay will acquire a 33.3 per cent voting stake in Adevinta and positions on its board. This means eBay would be able to participate in the management of Adevinta and could enable it to influence the business strategy for both Gumtree and Shpock, said the CMA.
In addition, having reviewed eBay’s internal documents at the time the decision was made to sell eCG to Adevinta, the CMA said there would have been a realistic chance eBay would have sold Gumtree to a different purchaser without retaining its influence.
It says this would have resulted in Gumtree becoming an independent competitor to eBay’s marketplace.
“There is a realistic chance that without this deal Gumtree and Shpock would have been direct competitors to eBay, which is by far the biggest player in this market,” said Joel Bamford, senior director of mergers at the CMA.
“It is important that people have choice when it comes to selling items they no longer require or searching for a bargain online, and that they can enjoy competitive fees and services.
“This is the latest in a series of merger probes by the CMA involving large digital companies, where we are thoroughly examining deals to ensure that competition is not restricted, and consumers’ interests are protected.”
Adevinta and eBay now have until 23rd February 2021 to offer legally binding solutions to resolve the CMA’s competition concerns.
The CMA then has five working days to consider whether to accept the offer instead of referring the deal to an in-depth investigation.