eBay and Adevinta have pledged to sell their UK second-hand sales sites Gumtree UK and Shpock in order to secure regulatory clearance for their $9.2bn classifieds ads merger.
The two companies, based in Silicon Valley and Norway, are hoping to create the world’s largest online classified advertising group. They announced the deal in July.
But the UK’s Competition and Markets Authority said last month that it was planning to launch an in-depth “Phase 2” investigation, which could result in the deal being blocked if the two companies did not address its fears that the combination could reduce competition.
The CMA said on Tuesday that eBay and Adevinta had offered remedies including Adevinta’s divestiture of Shpock and eBay selling its UK Gumtree business, including its Motors.co.uk used-car site.
“The companies have offered the sale of two businesses which we believe may address the competition concerns our investigation raised,” said Joel Bamford, senior director of mergers at the regulator. “The CMA will now review these proposals carefully before making our final decision.”
The UK businesses would together have represented less than 5 per cent of the combined group, if the merger had gone ahead as originally planned.
The regulator will decide whether to accept eBay and Adevinta’s proposal before the end of April.
“Competition between different online platforms is important for people selling used items or searching for a bargain online, as it leads to them receiving better services and lower fees,” Bamford said.
The two companies said in a statement: “eBay and Adevinta remain excited about the proposed combination of Adevinta and eBay Classifieds Group and now target closing the transaction in [the second quarter of] 2021, subject to final ratification of the remedies execution plan by the CMA and receipt of outstanding regulatory approval in Austria.”
The CMA has threatened to get tougher against big tech companies such as Google and Facebook as it prepares to take on new powers through the creation of a digital markets unit. The digital markets unit, which can define new rules to curtail the actions of specific tech companies, will begin its work next month.