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Supreme Court allows merger between digital platforms for sales of used cars

20.02.2023 - Competition, market and regulation

In 2019, Schibsted acquired the majority of Nettbil – a web-based auction service used by individuals to sell used cars to dealerships. At the time, Nettbil was a start-up with a low market share, while Schibsted controlled FINN, a platform for classified ads with a strong position within sales of used cars.

The acquisition was originally not subject to notification, but the parties were asked to submit a notification to the Norwegian Competition Authority (NCA) which ultimately blocked the transaction. Since then, the case has run its course in the Norwegian merger control system and became the first merger to be tested by the legal system in Norway. Last week, the Supreme Court arrived at the decision to allow the merger.

In its decision the Supreme Court upheld the decision of the Court of Appeals which had overturned the decision of the NCA and Norwegian Competition Appeals Tribunal (NCAT) to block the transaction.

Key in the decision was the question of market definition, i.e., whether Nettbil and FINN compete in the same relevant market. Nettbil and FINN both provide a platform to sell used cars – but with fundamental differences in services provided and pricing. The Supreme Court and Court of Appeal found that:

  • FINN and Nettbil are not in the same market – meaning Nettbil’s prices and product quality does not discipline FINN’s prices or product quality
  • Therefore, it is unlikely that the merger would have anticompetitive effect regarding prices or quality
  • It had not been established with sufficient likelihood that the merger would hinder product innovation

Oslo Economics advised Schibsted and its legal representation Wiersholm in the processes towards the NCA and NCAT. In our analysis, we found that the NCA made fundamental errors in their treatment of market definition and analysis of closeness of competition. The Supreme Court judgement points to the same errors in the NCA and NCAT decisions.

Jostein Skaar
Jostein Skaar
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