Trade Me still faces stop sign
‘‘We’d love to get on with our investment in a great Kiwi software company, but we appreciate the need for the commission to work through all the issues.’’
Trade Me spokesman Paul Ford
A decision on whether Trade Me should be allowed to take over Christchurch software firm Motorcentral has been delayed for a third time, with the country’s competition watchdog again laying out its concerns.
Motorcentral supplies software that is used to run about 500 independent car dealerships and in September launched a website, NeedaCar, which was on Monday advertising almost 22,000 cars for sale.
Trade Me applied for clearance to buy Motorcentral in July, saying it would continue to operate the 15-person company as a ‘‘standalone business’’. But anonymous objectors have told the Commerce Commission that Trade Me could use the acquisition to tighten its already-strong grip on the vehicle listings market.
Their main concern is that Trade Me could make it harder for Motorcentral dealers to upload their listings to rival websites, which include Autotrader and AA Carfair.
The Commission Commission had expected to reach a decision on whether or not to clear the takeover by December 21, but has now pushed that back to the end of February.
In a ‘‘letter of unresolved issues’’ published three days before Christmas, the commission said it was still not satisfied that the takeover would not substantially lessen competition.
The commission first set out its concerns about the merger in a letter in August and reiterated many of them in a second letter in November, after seeking feedback from the company.
Its latest letter states that Trade Me’s audience is already ‘‘consistently much larger than those of other established listings platforms’’ and that car dealers tend to view advertising on Trade Me as a ‘‘must have’’ product.
Competition in the online listings market – mainly from Autotrader and NZME’s Driven – appeared to be only a ‘‘limited competitive constraint’’ on Trade Me, the watchdog said.
The commission said there were many ways Trade Me might be able to use Motorcentral’s relationship with independent dealers to discriminate against rival listings websites, if the merger went ahead.
These could include imposing charges to interact with the Trade Me platform or delaying uploads.
However, if the takeover was blocked, there was a real chance Motorcentral would remain independent and would continue to develop its NeedaCar website in competition to Trade Me, the commission said.
Trade Me spokesman Paul Ford said it remained confident the proposed takeover would have a positive outcome for New Zealand car dealers and consumers and ‘‘looked forward to working this through with the commission in the New Year’’.
‘‘We’d love to get on with our investment in a great Kiwi software company, but we appreciate the need for the commission to work through all the issues and understand the facts and merits of claims made by competitors and other parties,’’ he said.
Trade Me Motors is the secondlargest earner for Trade Me, bringing in revenues of $64 million last year.
That was more than Trade Jobs and Trade Me Property combined, and only slightly less than the $70m in fees Trade Me earned from its ‘‘general items’’ marketplace.
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