Last month, Norway’s Competition Authority threatened to break up Schibsted’s takeover of Nettbil on the grounds that the acquisition removed any competition with Finn, the Schibsted-owned horizontal. Now it seems the Authority has followed through on that threat and instructed Schibsted to sell Nettbil.
“The acquisition removes the competitive pressure Nettbil exerts on Finn,” said Lars Sørgard, the director of the Norwegian Competition Authority. “Internationally, there is an increasing focus on the importance of facilitating competition in digital markets, in order to prevent individual players from gaining too much market power.”
Because individual players in digital markets can quickly obtain a large share of the market, the purchase of a small company like Nettbil could set a damaging precedent, according to Gjermund Nese, the department director at the Authority.
“If established large players are allowed to buy their challengers, this could reduce competition, even if the company being bought is relatively small at the time of the acquisition,” Nese said.
The Authority argues that Norway’s online used-car distribution market has relatively few players, and that Finn is by far the largest. While Nettbil is a newer player in the market, its strong growth over recent years would work well with Finn’s market dominance, leading to consolidation.
“Reduced competition in the market could lead to a poorer offer to consumers, for example through higher prices, reduced quality, or weakened innovation,” added Nese.
Schibsted bought Nettbil in December 2019. However, it didn’t report the deal to the Competition Authority until June of this year. At that point, it had already integrated Nettbil into its operating structure. In its 2019 annual report, Nettbil reported that Schibsted held a 67% stake in the company.
“We disagree with the conclusion and decision announced by the Norwegian Competition Authority. We will go through the decision thoroughly, but it’s clear that we will file a complaint within the deadline,” Atle Lessum, head of Schibsted Group communications, told the AIM Group by email.
When asked about the deal last month during a quarterly earnings report, CEO Kristin Skogen Lund said that Schibsted would do everything in its power to keep Nettbil as part of the company.
Schibsted and Nettbil still have a chance to do that. The Authority’s decision can be appealed to the Competition Appeals Board within six weeks. If Schibsted loses, Nettbil’s buyer will have to be approved by the Authority.