The CMA have recently announced their eBay Classified Group sale concerns. According to The CMA the transaction between eBay and Adevinta could pose a risk to competition in the UK due to higher prices and less choice for consumers.
eBay have responded with a statement that confirms the eBay Classified Group sale concerns and outlines that requirements are needed from the companies to rectify the issues and avoid further investigation. eBay has expressively stated that both they and Adevinta do not agree with the CMA’s reasoning.
This isn’t the first time eBay have been under the CMA’s spotlight, In 2018 they investigated and then cleared the company regarding the transaction where motors.co.uk was to be acquired by eBay.
The CMA’s view:
Currently, the reasoning set out by the CMA for this investigation is that the sale to Adevinta will give eBay 33.3% voting stake in Adevinta and positions on the Adevinta board. Meaning that eBay will be able to participate in the management of Adevinta and could enable it to influence the business strategy for both Gumtree and Shpock. The CMA state that the merger could lead to a loss of competition between Shpock, Gumtree and eBay with only Facebook remaining as a significant competitor which they state could lead to reduced consumer choice, increased fees, and less buying and selling platform choice for both buyers and sellers.
eBay & Adevinta’s view:
Although they disagree with The CMA’s reasoning, eBay and Adevinta have said that they will work with CMA in finding a suitable resolution and ensure that solutions are reached before the deadline of February 23, 2021. eBay has expressed that in 2019, eBay Classified Group’s UK business accounted for less than 10% of its consolidated revenues and Adevinta’s UK business accounted for only 1% of its consolidated revenues. eBay and Adevinta remain excited about the proposed transaction and look forward to closing.