The Competition and Markets Authority (CMA) said the deal will create the world’s largest online classifieds group and that its only significant competitor would be Facebook. eBay owns Gumtree, motors.co.uk and other sites around the world, while Adevinta is best known for its Shpock online and mobile marketplace. As part of the deal, eBay will take a 33 per cent stake in Adevinta and seats on the board.
As eBay already possesses the largest person-to-person marketplace in the UK, the watchdog believes this will reduce competition.
The CMA noted that internal documents from eBay indicate that at the time it made the decision to sell its classifieds business, it was prepared to sell it to a different group without taking a stake in it.
CMA senior director of mergers Joel Bamford said: “It is important that people have choice when it comes to selling items they no longer require or searching for a bargain online, and that they can enjoy competitive fees and services.
“There is a realistic chance that without this deal, Gumtree and Shpock would have been direct competitors to eBay, which is by far the biggest player in this market.”
Adevinta and eBay have a week to respond and come up with a legally binding solution to the CMA’s competition concerns.
After that the competition watchdog has five days to either accept the offer or launch an in-depth investigation into the deal.
Last week the CMA threatened online travel agent Lastminute.com with legal action unless it pays £1million in outstanding refunds to customers whose package holidays were cancelled. It is also investigating Facebook’s acquisition of Giphy, the database and search engine for short, looping videos.
Mr Bamford said the CMA is scrutinising big digital deals to “ensure that competition is not restricted and consumers’ interests are protected”.