One-way traffic warning in car ads
Trade Me’s proposed acquisition of software firm Motorcentral has run into strong opposition from an objector who warns it could ‘‘throttle’’ rivals to Trade Me Motors, such as Autotrader.
Trade Me applied to the Commerce Commission in July for clearance to acquire Christchurch-based Motorcentral, saying a merger would deliver ‘‘data-rich, more targeted, and better offerings to motor vehicle dealers’’.
But an anonymous submitter told the watchdog that Trade Me could use control over Motorcentral to steer dealers away from advertising their vehicles on sites other than Trade Me Motors.
Terry Williams King, general manager of Autotrader, which is the country’s second-largest vehicle classifieds site, said it was not behind the submission but shared its concerns.
Williams King said he could not comment further as Autotrader was also in discussions with the commission about the proposed takeover.
Motorcentral’s software is used to run about 500 car dealers on which it had a huge grip, the anonymous submission said. Most are understood to be independent dealers specialising in secondhand imports.
One feature of its software allows dealers to upload details of their vehicles to Trade Me Motors, Autotrader, Listselltrade, and other classified sites. It also lets them advertise their vehicles on a separate tab within their Facebook page.
In its July clearance application, Trade Me assured the Commerce Commission that it would run Motorcentral as a standalone business for the forseeable future, and would have no incentive to hinder Motorcentral customers from uploading listings to rival websites.
The anonymous objector was not convinced by those assurances.
‘‘Why wouldn’t Trade Me use Motorcentral to steer dealers to its platform? We expect that prospect is a key rationale for the merger, along with insulating Trade Me against looming rivalry from global social media platforms.’’
Motorcentral’s 500 dealers would then have to ‘‘copy and paste’’ their listings, for example into an Excel spreadsheet, to advertise them elsewhere, which they were unlikely to do because of the ‘‘cost and hassle’’.
The commission is due to rule on Trade Me’s application next month.