The Australian Competition and Consumer Commission (ACCC) today granted “unconditional merger authorisation” to Gumtree Cars’ proposed acquisition of Cox Australia Media Solutions (Cox Media), allowing Gumtree Cars to be combined with Cox Media’s CarsGuide and Autotrader sites.
Gumtree is owned by eBay Classifieds.
The move will result in eBay owning three distinct online auto media platforms: Gumtree Cars, CarsGuide and Autotrader, all of which it plans to continue to operate as separate platforms.
ACCC chairman Rod Sims said in a statement: “We authorised this merger because we concluded it was not likely to lead to a substantial lessening of competition, including in the supply of online automotive classifieds in Australia.
“Therefore it was not necessary to consider the public benefit limb of the authorisation test,” he said.
Mr Sims said Carsales was Australia’s leading provider of online automotive classified advertising and was “a significant competitive constraint on Gumtree and Cox Media”.
The ACCC added that Facebook Marketplace was also a growing competitor to Gumtree and Cox Media in the supply of online automotive classifieds services.
“Our investigation showed that Carsales and Facebook Marketplace are likely to continue to provide significant competition in online automotive classifieds after Gumtree acquires Cox Media,” Mr Sims said.
“We also found that Gumtree and Cox Media focus on different segments, with Gumtree focussing on private seller listings and Cox Media focusing on dealer listings.”
Gumtree is a subsidiary of eBay Classifieds Holding BV, whose ultimate parent company is eBay Inc. eBay operates a multi-category general classifieds website in Australia.
Cox Media is a subsidiary of Cox Automotive, which is 70 per cent owned by Cox Automotive International Sarl and 30 per cent owned by DealerMotive Ltd, a consortium of Australian dealer groups. CarsGuide and Autotrader provide automotive editorial content and automotive classifieds.
The ACCC said it also investigated the impact of the acquisition on the supply of online display advertising on digital automotive content providers.
It reported that it “was satisfied that the acquisition is unlikely to result in a reduction of competition for supplying online display advertising to advertisers wishing to target potential car buyers”.
Mr Sims said many advertisers use third parties to place targeted advertisements to individual consumers based on browsing history data on a wide range of websites.
“Further, we found there are a range of other digital automotive content providers where direct advertisers could place automotive-related advertising, including Drive, Carsales, GoAuto and digital versions of automotive print publications,” he said.
In its review, the ACCC focused on the likely effects on competition, as well as whether the public benefit from the proposed acquisition outweighs the public detriment.
In particular, the ACCC said it considered how closely Gumtree and Cox Media (through CarsGuide/Autotrader) compete with each other in the supply of online automotive classifieds to commercial advertisers (eg car dealers) and private advertisers and whether competition from other online classifieds platforms (for example, Carsales, Facebook Marketplace, Drive.com.au and the Trading Post) will constrain Gumtree post-acquisition.
Gumtree submitted to the ACCC that the proposed acquisition would deliver positive benefits, including: a stronger automotive classifieds platform that would allow advertisers to cross-list on both platforms; an increased audience for advertisers and potential buyers; a stronger alternative to Carsales and Facebook Marketplace for both advertisers and potential buyers; the ability for Gumtree to make further investments in its product to improve the product experience for users; and enabling Gumtree to improve its service offering for advertisers, including through the development of dealer tools more comparable to those of Carsales.
Cox Automotive Australia (CAA) first announced on December 20 last year that it had sold its media division to eBay, in a move that would combine eBay subsidiary Gumtree Cars with Cox’s CarsGuide and Autotrader.
It said each website would operate independently but have eBay as the common owner.
The move – which at the time was yet to be approved by the ACCC – ties in with repeated statements made in 2019 by Gumtree Cars in Australia that eBay intended Gumtree to become the leading auto classifieds website in Australia and challenge market leader Carsales.
Traffic attracted to the combined sites of Gumtree Cars, CarsGuide and Autotrader is estimated as being close to the two million visitors generated by Carsales each month.
Autotrader has about 2300 dealers and 90,000 listings, and Gumtree has about 1800 dealers and 80,000 private-party listings. CarsGuide has Australia’s largest online editorial traffic for car research.
The purchase follows the successful acquisition by eBay of auto classified website Motors.co.uk in Britain earlier this year from Cox Automotive UK. That move prompted Cox Automotive Australia to approach eBay to test their appetite for a similar deal.
The purchase price has not been revealed but GoAutoNews Premium has previously estimated that it would be substantially more than the $39 million the dealers had invested in their CarsGuide online business by the time it was incorporated into Cox Automotive Australia in 2017.
Since then, Autotrader has been added to the fold and CarsGuide has grown significantly in traffic and profit.
Gumtree Australia head of Motors, Richard Dicello, told GoAutoNews Premium last year: “What it does is signal that this is definitely part of our global strategy with the eBay Classified Groups and with Gumtree locally to be number one in Australia.
“As you know we have been quite open around our ambition to be number one in the motors marketplace in Australia and we see this as a significant step in solidifying that strategy.
“When you consider the three sites, you have Gumtree, which has had great success in building up a really strong position in the privately listed space, and then Autotrader in the past couple of years has done an outstanding job building up the dealer listings, and of course CarsGuide is strong in the automotive content space.
“So this is absolutely part of our strategy and a significant step forward in meeting what we see as a significant need in the market to create an attractive and viable option for motor vehicle dealers and consumers in this country,” Mr Dicello said.
Martin Ward, the chairman of DealerMotive and also CEO of AP Eagers, Australia’s biggest dealer group, told GoAutoNews Premium: “Bringing together eBay and Gumtree with the formidable CarsGuide and Autotrader creates a compelling offer for Australian car buyers.
“It builds on the strengths of eBay’s platform for private sales while continuing to harness the advantages of the dealer network to create a more competitive classified landscape in automotive retailing.”
Alessandro Coppo, senior vice-president and general manager of eBay Classifieds Group, said in a statement: “This acquisition is an important part of eBay Classifieds Group’s verticalisation strategy in the automotive market, following our successful acquisition of Motors.co.uk in the United Kingdom earlier this year.
“Gumtree is already an established player in the Australian private sales market and the addition of CarsGuide and Autotrader will make our offerings even more compelling by giving Australian consumers and dealers more reach and choice in the market,” he said.
Shaun Cornelius, CEO of Media Solutions for Cox Automotive Australia, told GoAutoNews Premium: “The plan is to support the existing brands in the market which is Autotrader being a new brand and getting good traction in the market, CarsGuide being the number one editorial brand and obviously Gumtree in Australia covering multiple categories, not just automotive.
“So those three brands will continue to be supported independently in the future.
“Our business becomes part of the eBay Classified Group. After the deal we will continue to operate independently but obviously we will work with Gumtree Australia to identify opportunities to work together.”
Commenting on why Cox was leaving online media in Australia, Mr Cornelius said: “Cox in Australia see big opportunities for wholesale and solutions for retail dealers and that is the strength they are focusing on in this market and obviously there is the track record of Cox divesting itself of the consumer business in the UK.”
By Neil Dowling
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