Telstra dismissed concerns raised by the Australian Competition & Consumer Commission (ACCC) about the telco’s deal to sell classifieds service Trading Post to Carsales.com.
Under the proposed deal, Telstra will hand over management of Trading Post to Carsales and Quicksales.com.au will operate the Tradingpost.com.au website. The transaction requires ACCC approval.
However, the ACCC issued a statement on Friday outlining concerns with the deal and asking for more information to assist with its review. As a result, the competition agency deferred a final decision on the deal until 29 November.
“The ACCC’s preliminary view is that the proposed acquisition would remove Trading Post as one of Carsales’ closest and most effective competitors in the online automotive classifieds market,” ACCC Chairman Rod Sims said. “The Trading Post provides an alternative that is popular with dealers and private advertisers. We are concerned the proposed acquisition would remove this choice.”
However, a Telsta spokesman appeared unworried about ACCC’s concerns.
The ACCC announcement “is a fairly standard part of this type of process,” he said. “We’ll make sure we stay engaged with the ACCC to work through their concerns so they can make a fully informed decision.”
The ACCC asked the market for additional comment by 2 November. The agency detailed several concerns in a statement of issues (PDF) released on Friday.
“The ACCC’s preliminary view is that the proposed acquisition is likely to result in a substantial lessening of competition in the national market for the supply of online automotive classified advertising,” the ACCC wrote in the document.
Carsales already leads the market by a significant degree, the ACCC said. “If the proposed acquisition proceeds, it would significantly increase Carsales’ already strong share of the market. As measured by audience and inventory, it is estimated that the market share of Carsales would increase by approximately 10-11 percentage points.”
“By adding the significant audience reach and advertiser penetration of Trading Post to the Carsales network, its already market leading positions will be further strengthened, making it even less likely that a dealer or private car advertiser would choose one of the remaining non-Carsales sites for its advertisements instead of Carsales, and making it less likely that a buyer looking for an automobile would want or need to visit any non-Carsales website.
“Accordingly, the proposed acquisition is likely to raise barriers to entry, further hindering the likelihood of competitors (including potential new entrants and existing market participants) being able to successfully challenge and constrain the position of Carsales.”
Telstra has not yet indicated how the acquisition may affect jobs at Trading Post.
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