The Competition and Markets Authority (CMA) in the UK is conducting an investigation into eBay’s proposed sale of Gumtree to Adevinta ASA, a classifieds website headquartered in Norway. The CMA has raised concerns about the potential negative impact on competition in the British market. However, this does not mean the deal is automatically off the table. eBay and Adevinta have the opportunity to propose remedies that can address the CMA’s concerns and potentially avoid further investigation.

The deal between eBay and Adevinta involves eBay acquiring a 33.3% voting stake in Adevinta and gaining seats on its board. This would give eBay influence over the decision-making processes of both Gumtree and Adevinta’s UK-based sales site, Shpock. To address the CMA’s competition concerns, the companies are working together to come up with legally binding solutions. They have until February 23 to submit these proposals. The CMA will then evaluate them within five working days and decide whether to accept them or proceed with a more thorough investigation, which could cause significant delays to the deal.

eBay and Adevinta argue that the transaction will not have a significant impact on competition in the UK. They highlight the fact that eBay’s UK business accounted for less than 10% of its overall revenues in 2019, and Adevinta’s UK business contributed only 1% to its consolidated revenues in the same year. However, the CMA retains the power to block the deal, as seen in its decision to prevent the proposed merger between Sainsbury’s and Asda in 2019. It is worth noting that the eBay-Gumtree deal has received less attention compared to the Sainsbury’s-Asda merger.

In conclusion, the sale of Gumtree from eBay to Adevinta is currently under investigation by the UK’s competition watchdog, the CMA. Both eBay and Adevinta are working on proposing solutions to address the CMA’s concerns about competition reduction. The final decision rests with the CMA, which can either accept the proposed remedies or initiate a more extensive investigation.

Useful 2 links relevant to the article (only when applicable):
Competition and Markets Authority (CMA) official website
eBay official website