The ACCC has cited a likely reduction in competition in the online advertising market as the basis for its opposition to Carsales’ proposed acquisition of Trading Post.

In August 2012, Telstra announced that it had outsourced its Trading Post classifieds business to Carsales.com by way of a licence of its brand and operations, with an option for Carsales.com to acquire the business at the end of the licence period.

The ACCC issued a statement of issues in October 2012, indicating that its preliminary view was that the proposed acquisition would remove Trading Post as one of Carsales’ closest and most effective competitors in the online automotive classifieds market.  After a public review process, on 20 December 2012 the ACCC announced that it would oppose the proposed acquisition based on its concerns in respect of online automotive classified advertising.   In its view, the acquisition would increase Carsales’ market power and reduce competition, to the detriment of automotive dealerships and private sellers.

The ACCC did not express concern in respect of the other area in which the businesses overlap, being online general merchandise.  A public competition assessment will be released in due course.

Public opposition to a proposed acquisition is an infrequent occurrence.  During the 2011/2012 financial year, the ACCC only publicly opposed one proposed acquisition – when ALH Group Pty Ltd (75% owned by Woolworths Limited)—proposed to acquire hotels and takeaway liquor stores in NSW.  In the quarter to 30 September 2012, the ACCC did not oppose any proposed acquisitions, as reported in the most recent issue of ACCCount.