Watchdog mulling amendments to Trade Me deal?
07 Sep 2017
Although it hasn’t reached a final decision yet, New Zealand’s Commerce Commission has said it wasn’t quite convinced that Trade Me’s proposed takeover of dealer platform MotorCentral won’t result in “competition issues” in the country’s online auto classifieds market.
The Commerce Commission is scheduled to deliver its final ruling by Oct. 27, but has invited Trade Me to meet with the commission to discuss its concerns before a decision is made.
The commission told Trade Me that it was concerned the classified site might have the “incentive and ability” to prevent dealers from advertising on rival auto sites if the merger went ahead, Stuff reported.
It follows an anonymous objection lodged with the watchdog in August that warned the merger would “throttle” competitor auto sites if it went ahead.
The submitter argued that, following Trade Me’s acquisition of software firm Autobase, it restricted dealers from posting listings to other classified sites and as a consequence, “other listings platforms struggled to scale.”
MotorCentral is used by around 500 dealerships across New Zealand that mostly specialize in selling imported used cars.
In Trade Me’s takeover clearance application, it revealed MotorCentral was planning to launch its own auto site, which would advertise vehicles, alongside finance and insurance.
If the merger doesn’t go ahead, the MotorCentral site would become a competitor to Trade Me Motors, from which Trade Me derives much of its revenue — more than its property and its job sites.
However, Trade Me spokesman Paul Ford said the company was confident the acquisition would be good for the market and said the “letter of issues” from the commission outlining its concerns was standard.
“Approximately one-third of all clearance applications proceed to the letter of issues phase, with two-thirds then cleared after that,” he said.