ACCC flags competition concerns with Trading Post takeover deal between Telstra and CarSales

The competition regulator has signalled some trouble with the proposed acquisition of iconic second-hand goods trading publication the Trading Post by CarSales.

The unusual move was announced in August, with Telstra saying it would licence the Trading Post brand and website to CarSales to operate alongside its existing QuickSales website.

But last Friday, the Australian Competition and Consumer Commission released a statement of issues outlining some concerns it had with the proposal – the main one being it would reduce competition in the market.

“The ACCC’s preliminary view is that the proposed acquisition would remove Trading Post as one of Carsales’ closest and most effective competitors in the online automotive classifieds market,” ACCC chairman Rod Sims said.

In its statement, the ACCC said its preliminary view is that any small increase in the price, or decrease in the quality, of online classified advertising is unlikely to make people switch to print.

“This suggests that print advertising is not part of the relevant market,” it said, underlining the importance of the CarSales-Telstra deal.

Both CarSales and Telstra were contacted this morning. CarSales is currently in blackout before its AGM this week, while Telstra said it will “stay engaged” with the ACCC to “work through their concerns”.

“The Trading Post provides an alternative that is popular with dealers and private advertisers. We are concerned the proposed acquisition would remove this choice,” Sims said.

Trading Post has had a rough few years. Telstra has written down its value substantially since a $646 million purchase back in 2004. In 2009, the print edition was axed, and in that same year the publication suffered a writedown of more than $100 million.