Competition regulator blocks Friends Reunited sale

A good example of competition regulation in the news today. The OFT has referred ITV’s proposed disposal of Friends Reunited to the Competition Commission on the grounds that, post sale, there will be just two main competitors in the market for researching ancestry.

The text of the OFT announcement makes interesting reading (see below). Essentially the argument is that the disposal will create two dominant competitors (a duopoly) who will have an incentive to raise prices and prevent new entrants into the market (thereby stiffling competition?)

“The OFT has today referred the anticipated acquisition of Friends Reunited Holdings Limited by Brightsolid Group Limited to the Competition Commission for further investigation.

Brightsolid, which runs websites Find My Past.com and 1911 Census.com, and Friends Reunited which owns Genes Reunited.com, are two of the three largest suppliers of online genealogy services in the UK. These websites allow users to search and access historical information and documents such as census results, birth, marriage and death records, and also supply family tree software.

Currently, the merging firms both compete with Ancestry.co.uk, the market leader, for these services. The OFT’s investigation focused on the extent of direct competition between the merging parties, the level of competition provided by other smaller online genealogy providers, and the potential for future entry or expansion in this market.

On the basis of the evidence it received, the OFT does not believe that the current competition in this market or the potential for future entry is sufficiently strong to prevent the merged firm from reducing the quality or range of its services, or possibly raising prices.!