UK's CMA Raises Competition Concerns Over Adevinta - EBay Deal

(RTTNews) - The UK Competition and Markets Authority said it has found that Adevinta's anticipated $9.2 billion purchase of eBay Classified Group could lead to higher prices and less choice for consumers in the UK, following its Phase 1 review.

Adevinta and eBay Classified Group both operate online classified advertising platforms in the UK. The websites - Adevinta's Shpock and eBay Classified Group's Gumtree - allow people to buy and sell a broad range of used or new goods such as clothing, electronics and furniture.

With the sale to Adevinta, eBay will acquire a 33.3% voting stake in Adevinta and positions on the Adevinta board. It means 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 said.

eBay and Adevinta now have the opportunity to propose potential remedies to avoid the transaction being referred to further investigation.

Ebay said the company and Adevinta do not agree with the CMA's reasoning. But they will work constructively with the CMA and are confident in finding a suitable resolution.

eBay and Adevinta will together propose legally binding solutions to resolve the CMA's competition concerns before the deadline of February 23, 2021. The CMA will then have five working days to consider whether to accept the solutions, or to refer the deal to an in-depth investigation.

Ebay noted that it will provide a further update in early March following the decision.