OFT drags its heels over Zoopla and Digital merger

Wednesday 21st March 2012
Written by Rosalind Renshaw

Amid mounting speculation that the proposed merger between the Digital property portals and Zoopla will be referred to the Competition Commission, the OFT said yesterday that it had still not made a decision.

According to the OFT’s website, the decision should have been made on March 1, but a spokesman told EAT that the administrative timetable had slipped.

He said the decision would be made available ‘in due course’, within a month.

He would not be pressed on the reasons for the delay.

The proposed merger was referred to the OFT last autumn after the two businesses decided to form one entity in order to mount a viable challenge to the domination of Rightmove, which claims over 80% market share.

Most decisions on mergers and acquisitions are made by the OFT within weeks. For example, yesterday it gave the go-ahead for the acquisition for IT firm Mortgage Brain to acquire its rival MortgageStream. That deal was only referred to the OFT in January.

If the OFT were to decide to refer the Digital-Zoopla merger to the Competition Commission, a decision could be another six months away.

Last year, paradoxically, the OFT decided to refer a proposed merger between Mortgage Brain and another competitor, TrigoldCrystal, to the Competition Commission. Both firms walked away from the merger, saying it would have made the deal too costly.

Although it is not known why the OFT has delayed making a decision on the Digital-Zoopla deal, sources who understand the process say that there can be delays if the OFT tells the parties of its decision and one or both of them challenge it.

(5) Comments

Added by winky on 2012-03-23 06:46:49

Are are giving a back hander to the OFT???
Added by Steve on 2012-03-21 16:56:09

Oh my god!

A news article on a merger between DPG and Zoopla and people still have to talk about rightmove, rightmove, rightmove. Rightmove clearly have no influence over this and cannot put any legal pressure on the OFT.

I don't believe rightmove would be heavily affected by a merger as both companies are already rivals and if rightmove have 80% then that won't change, it will just mean DPG and Zoopla will have a slightly larger portion but still no more than 20% giving RM a still healthy lead.

I can only see DPG putting up their prices or giving agents no option but to sign up with all 3 of their websites (this is what they did to us several years ago).

Has any agent seen this happeinging to them?
Added by Benny1 on 2012-03-21 11:58:43

Rightmove would do this legal route for 2 options

1 - They may win

2 - It holds of the merger and biggest challenge ever and they can nick some more money for another 6 months...
Added by Devon Agent on 2012-03-21 10:24:23

I'm so confused by this. If Rightmove have 80% of the market then they have just about monopolised it. Why would this proposed merger do anything other than provide greater competition and challenge that position? Yes, a subsequent merger between Rightmove and the newly merged company would be a problem, but this delay now makes no sense.

Does anyone on here know more? Is it a case of Rightmove's legal team provding pressure?
Added by sm on 2012-03-21 10:13:47

i hope this really damages rm

10+4=14!!!

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