eBay faces CMA probe over £7bn advertising deal

The Competition and Markets Authority (CMA) is scrutinising eBay’s £7 billion deal with Norwegian business, Adevinta, as part of a crackdown on digital monopolies.

The deal involves the sale of eBay’s classified ads division to Adevinta for £1.8 billion in cash and 44 per cent of the combined firm. The deal includes Gumtree and Motors.co.uk, websites which have millions of UK users between them.

It makes eBay the largest shareholder in Adevinta, which owns online advertising websites in 20 countries, with annual revenue worth £1.3 billion.

Susannah Streeter, investment analyst at Hargreaves Lansdown, said: “This deal will create the largest online business for classified ads, so it is not surprising that question marks have been raised with regulators.’

The CMA has until February 16 to finish the first stage of its investigation into whether the deal could substantially harm competition. It could block the deal if it fears it will be detrimental for British consumers.

The CMA is in the processing of setting up a digital regulator to stop tech giants from swallowing up smaller rivals – described as a ‘killer strategy’ that preserves their dominance.

The Digital Markets Unit will enforce a code of conduct on firms including Facebook, Google and Amazon to ensure they don’t abuse their power. Firms which break the rules will face billions in fines, whilst Facebook and Google could also be forced to pay news publishers for using their content.

Regulators elsewhere are also making similar efforts to curb the same online giants. Facebook could be broken up after 46 US states launched a case claiming it snapped up competitors in a ‘predatory’ manner. Google faces three separate anti-trust cases filed by US states.

In China, billionaire entrepreneur Jack Ma, who has disappeared from public view since late October after criticising the Chinese regime, is being pressurised to dismantle his tech empire after regulators initiated probes into his companies, Alibaba and Ant Group.

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