Commerce Commission roadblocks Trade Me’s Motorcentral acquisition

Acquisition could be blow to competition, Commission says

The Commerce Commission has blocked online marketplace Trade Me’s plan to acquire Christchurch-based supplier of motor vehicle dealer management software Motorcentral.

Motorcentral is used by motor vehicle dealers to manage their businesses. It includes inventory tracking, customer relationship management and uploading vehicle listings to online advertisers. Trade Me currently operates DealerBase which has some of those functions.

Commission chairman Dr Mark Berry said the Commission could not be satisfied that the merger would not be likely to substantially lessen competition in the relevant markets, given that Trade Me, is the most popular online classified advertising platform for motor vehicle dealers and Motorcentral the largest provider of dealer management software to independent motor vehicle dealers in New Zealand.

“Based on the evidence received, we could not exclude the real chance that this could result in a substantial lessening of competition in these markets, including deterring new entry,” Berry said.

“Trade Me is an important advertising platform for car dealers and we were concerned the merger could result in Trade Me creating barriers for dealers who do not use Motorcentral’s DMS.

“Likewise, we were concerned Motorcentral could create barriers for dealers who want to list on rival advertising websites or any new potential entrants. On the evidence available to us, we could also not exclude the real chance that, absent the merger, Trade Me could become a stronger competitor to Motorcentral.

“The merger could also entrench the market power Trade Me holds for online classified advertising to motor vehicle dealers.”

Trade Me announced its plan to acquire Motorcentral in July 2017 with the head of Trade Me Motors Alan Clark saying it would be business as usual for Motorcentral customers and that it would continue to operate as a standalone business.

“This would include the ability for dealers to upload listings to a range of websites including Autotrader, Driven and Trade Me Motors,” he said.

Trade Me said at the time it expected a decision from the Commerce Commission within 40 days.

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