ACCC brokers media bundling back-down

AUSTRALIA’S two biggest media groups, News Limited and Fairfax Media, have changed the classified advertising bundling rules brought in following their agreement earlier this year to combine Carsguide and Drive advertising online.

In an effort to cut the costs of dealer representation for both groups, News and Fairfax agreed to combine their classified advertising sales activities into drive.com.au with Drive serving Carsguide’s classifieds online and with Drive’s account managers dealing with dealer clients for both Carsguide and Drive.

The ads for Drive and Carguide were made available on both websites. Dealers were told of the benefits of dealing with one account manager. Dealers’ advertisements would also reach a wider audience.

But dealers and other websites owners complained to the ACCC because dealers were told they could no longer advertise on one of the websites without buying advertising on the other.

They accused the two media groups of possible third line forcing because dealers were told that if they did not want to sign the new bundle agreement they would no longer by able to list on either Drive.com.au or Carsguide.com.au. It was buy both or get none.

One of the complainants, Sandy Richards, who runs Armadale Motors, a used car business which sells up to used 20 cars a month in Melbourne, was incensed by the move.

Mr Richards told GoAuto the bundle denied him of the right to choose one site or the other to control his advertising costs.

But he said he was also concerned about the bigger picture. He questioned what would happen if News and Fairfax took big positions in Carsales when it lists later this year. Mr Richards said that potentially dealers could be forced to buy classified on all websites owned by the big media groups.

He said that if the bundling arrangement was not knocked on the head by the ACCC, dealers could have potentially seen a day when they could not buy Carsales advertising without buying Drive and Carsguide as well.

ACCC Director, Lin Enright, told GoAuto that the complaints led to “discussions” between the ACCC and News and Fairfax in which the two media groups, without making an admission of breaching the Trade Practices Act, agreed to allow advertising on Drive without having to buy listings on Carguide.

In a letter to Mr Richards, the ACCC said there was no third line forcing in the arrangement but there were other areas of the Act that were brought to the attention of the media groups.

Under the new rules, dealers can buy classified listing on Drive without having to buy Carsguide. However, they are not able to by listings on Carsguide without buying Drive as well.