05:07
Faizan
Recently the Australian Competition & Consumer Commission revealed that Carsales Limited proposed to acquire the TradingPost business from Telstra Corporation Limited.
Whilst the ACCC review appears to consider the proposal by Carsales Limited to be a 'general merchandise' oriented acquisition for their website brand quicksales.com.au; the reality is that it would also remove a serious competitor within the used cars, used bikes and used boats marketplace.
The existing market share held by Carsales Limited within the automotive market online is exceptionally close to being a monopoly (if not already) and the acquisition of TradingPost will further emphasize the dominance of their various websites.
There is a recent example of two very large organizations with significant resources at their disposal forming an alliance between their online car sales websites in an effort to compete with Carsales Limited - this alliance was created in spite of being previously in competition with each other and also having significant media resources at their disposal. This particular alliance is between carsguide.com.au (News Ltd) and drive.com.au (Fairfax Media) where these media giants are sharing their inventory across their national print and online publications in an effort to compete with Carsales websites.
It is difficult for the general consumer to discern the market reach of the market leading sites because used car dealerships submit their inventory across multiple online sites with thanks to "dealer management system" applications - however, if one takes the time to review the number of private seller vehicles on each site than a clearer picture is revealed regarding the success of each site. For example, as at 2nd June 2012 (prior to the alliance of drive.com.au and carsguide.com.au) the following number of private seller vehicles were available on these three top sites:
CarSales.com.au - 74,950 Cars for sale by Private Sellers
CarsGuide.com.au - 15,441 Cars for sale by Private Sellers
TradingPost.com.au - 15,210 Cars for sale by Private Sellers
The numbers demonstrate that TradingPost plays a significant role to the online car sales market. Removing the existing competition between CarSales and TradingPost via the proposed acquisition will be vastly detrimental to the competitive online marketplace and further emphasize CarSales dominance.
Furthermore, the 'general merchandise' market delivered by the TradingPost provides a unique offering to private sellers with a perceived marketplace dominated by private individuals. In contrast, the CarSales operated quicksales.com.au website is heavily dominated by a business to consumer marketplace. The unique private individual sellers' marketplace offered by TradingPost will ultimately be lost as a result of the proposed acquisition due to the highly commercial business nature of quicksales.com.au.
The Australian Competition and Consumer Commission (ACCC) is reviewing the proposed acquisition under Section 50 of the Competition and Consumer Act 2010. The act prohibits acquisitions that substantially lessen competition in a market, or are likely to do so.
Whilst the ACCC review appears to consider the proposal by Carsales Limited to be a 'general merchandise' oriented acquisition for their website brand quicksales.com.au; the reality is that it would also remove a serious competitor within the used cars, used bikes and used boats marketplace.
The existing market share held by Carsales Limited within the automotive market online is exceptionally close to being a monopoly (if not already) and the acquisition of TradingPost will further emphasize the dominance of their various websites.
There is a recent example of two very large organizations with significant resources at their disposal forming an alliance between their online car sales websites in an effort to compete with Carsales Limited - this alliance was created in spite of being previously in competition with each other and also having significant media resources at their disposal. This particular alliance is between carsguide.com.au (News Ltd) and drive.com.au (Fairfax Media) where these media giants are sharing their inventory across their national print and online publications in an effort to compete with Carsales websites.
It is difficult for the general consumer to discern the market reach of the market leading sites because used car dealerships submit their inventory across multiple online sites with thanks to "dealer management system" applications - however, if one takes the time to review the number of private seller vehicles on each site than a clearer picture is revealed regarding the success of each site. For example, as at 2nd June 2012 (prior to the alliance of drive.com.au and carsguide.com.au) the following number of private seller vehicles were available on these three top sites:
CarSales.com.au - 74,950 Cars for sale by Private Sellers
CarsGuide.com.au - 15,441 Cars for sale by Private Sellers
TradingPost.com.au - 15,210 Cars for sale by Private Sellers
The numbers demonstrate that TradingPost plays a significant role to the online car sales market. Removing the existing competition between CarSales and TradingPost via the proposed acquisition will be vastly detrimental to the competitive online marketplace and further emphasize CarSales dominance.
Furthermore, the 'general merchandise' market delivered by the TradingPost provides a unique offering to private sellers with a perceived marketplace dominated by private individuals. In contrast, the CarSales operated quicksales.com.au website is heavily dominated by a business to consumer marketplace. The unique private individual sellers' marketplace offered by TradingPost will ultimately be lost as a result of the proposed acquisition due to the highly commercial business nature of quicksales.com.au.
The Australian Competition and Consumer Commission (ACCC) is reviewing the proposed acquisition under Section 50 of the Competition and Consumer Act 2010. The act prohibits acquisitions that substantially lessen competition in a market, or are likely to do so.
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