You are here: Home - Household Bills - News -

Gumtree sale ‘could lead to higher prices and less choice’

0
Written by:
16/02/2021
Warnings have been raised over the proposed sale of listings site Gumtree, with the suggestion that the deal could result in consumers facing higher fees and less choice when it comes to selling their old items.

Gumtree is currently owned by eBay, but is the subject of a proposed takeover by Adevinta, parent firm of ‘online boot sale’ website Shpock for £6.5bn. The deal would see eBay take a 33.3% voting stake in Adevinta, as well as positions on the Adevinta board.

The Competition and Markets Authority (CMA) has cautioned that this would give eBay influence over the management of Adevinta, and potentially the business strategy for both Gumtree and Shpock. 

The CMA is conducting an investigation into the proposed sale, and said that it believes eBay had a “realistic chance” of selling Gumtree to a different purchase without retaining its influence, which would have meant Gumtree became an independent competitor to eBay’s marketplace.

The body has now completed its phase one investigation into the deal, and warned that it could lead to a loss of competition between Shpock, Gumtree and eBay, with Facebook Marketplace remaining as the only “significant competitor”.

As a result, this could reduce choice, lead to higher fees for buyers and sellers, and limit innovation in the sector.

Joel Bamford, senior director of mergers at the CMA, said that it was important that people have choice when it comes to selling their old items or shopping for a bargain online, and that they can enjoy “competitive fees and services”.

He continued: “There is a realistic chance that without this deal Gumtree and Shpock would have been direct competitors to eBay, which is by far the biggest player in this market.”

Adevinta and eBay now have until 23rd February to offer solutions to resolve the CMA’s concerns. At this point the CMA can decide to accept those solutions or refer the deal on for an in-depth investigation.

eBay last year came under fire for failing to tackle its ‘flawed’ review system which was leading to shoppers being misled

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week