ACCC blocks carsales-TradingPost deal | Updated: 5:37:35 PM, Friday December 21, 2012
The future of Telstra Corporation’s Trading Post is under a cloud after the competition regulator blocked a proposed deal with online classifieds operator carsales.com.
Under the deal announced in August, carsales planned to relaunch TradingPost.com.au using staff and infrastructure from its quicksales.com.au website.
The two websites would remain online as separate brands, with any item listed for sale on quicksales to also appear on TradingPost and vice-versa.
About 100 jobs at TradingPost would have gone if the deal had proceeded.
However, the Australian Competition and Consumer Commission (ACCC) on Thursday blocked the deal, saying it was likely to remove a close and effective competitor of carsales in automotive classifieds.
‘Trading Post is a well-established and high-profile brand for automotive classifieds advertising and provides an important competitive constraint on carsales,’ ACCC chairman Rod Sims said in a statement.
‘The proposed acquisition would significantly increase carsales’ market power and competition would be substantially reduced to the detriment of automotive dealerships and private advertisers.’
The ACCC’s statement of issues, released in October, had already flagged concerns about the deal.
Carsales chief executive Greg Roebuck labelled decision as disappointing and said the combination of quicksales and TradingPost would have brought ‘much needed competition to the general classifieds and auction space.
‘In recent years the general classifieds and auction space has been increasingly dominated by a single overseas-owned operation,’ Mr Roebuck said in a statement.
‘In association with quicksales.com.au, a revitalised Tradingpost would have delivered stronger choice to consumers and businesses alike, as well as keeping both taxes and employment in Australia.’
In 2004, Telstra paid $636 million for the Trading Post Group, which at that time included newspaper publications and a number of online websites.
However, the investment struggled to deliver for the telco, as the likes of auctions site eBay gained in popularity.
Telstra opened the TradingPost website to online auctions in 2008, and closed the Trading Post classifieds newspaper, which had been in publication 42 years, in 2009.
It has also written down about half of TradingPost’s book value and the ACCC’s rejection of the deal with carsales raised speculation Telstra would look to close down the company.
A Telstra spokeswoman said in an emailed statement the company’s media unit had been reviewing its advertising businesses to identify growth opportunities in a challenging and competitive market.
As part of that review, the deal with carsales had been reached and Telstra was therefore disappointed with the ACCC’s decision.
‘Telstra will continue to consider its options as it moves to improve the profitability and competitiveness of the TradingPost brand,’ Telstra said.
At 1423 AEDT, Telstra was up 2.5 cents at $4.35, while carsales had fallen nine cents to $7.49.