eBay responds to UK regulator's halt to $9.2 billion deal

eBay has reportedly issued a statement regarding the UK Competition and Markets Authority's concerns about Adevinta's acquisition of eBay's Classifieds Group, and said eBay and Adevinta now have the opportunity to propose possible remedies to avoid further investigation of the transaction.

Earlier, Britain's competition regulator expressed concerns about Adevinta's planned $9.2 billion acquisition of U.S. e-commerce group eBay's classifieds business, sending the Norwegian company's shares down 4.3%.

"The CMA is concerned that the merger may result in a loss of competition between Shpock, Gumtree and eBay's marketplaces, with only Facebook Marketplace remaining the dominant competitor," the UK Competition and Markets Authority ( CMA) said in a statement.

That is, the CMA is worried that Adevinta will acquire eBay's classifieds group and even further gain market dominance, which can only be matched by Facebook Marketplace. In their view, "this may reduce consumer choice, increase costs or reduce innovation in platform supply, allowing people to buy and sell goods online."

The action taken by the CMA this time reflects the Western idea of ​​separation of powers and checks and balances. Considering the previous practice of European countries to impose digital taxes on Internet giants such as Amazon, Facebook and Google and the antitrust investigations launched, it seems that Europe is also looking for an opportunity to break away from the influence of the United States and build its own Internet "moat" to catch up with the gap that was previously opened in the Internet field.

In the latest CMA merger investigation involving large digital companies , the regulator said it was “thoroughly scrutinizing transactions to ensure that competition is not restricted and consumer interests are protected.” The CMA said this month that Viagogo must sell StubHub’s international business after it bought the ticket resale business from eBay for $4.05 billion.

The CMA also noted that by selling its classifieds business, eBay would gain 33.3% of Adevinta's voting rights and a position on Adevinta's board. Adevinta said the UK accounts for less than 10% of eBay's classifieds business's consolidated revenue and less than 1% of Adevinta's consolidated revenue.

eBay said that although eBay and Adevinta disagree with the CMA's arguments, they will work constructively with the CMA and are confident that a suitable solution can be found. Together with Adevinta, they will propose a legally binding solution to address the CMA's concerns before the February 23 deadline. The CMA will accept the solution or launch an in-depth investigation within 5 working days. eBay expects to provide an update on the transaction in early March.

E-commerce platform

eBay Platform

Cross-border e-commerce market