The Competition and Markets Authority (CMA) has warned it could block the merger of two property search firms as it could lead to a worse deal for homebuyers.
The AMC has launched an investigation into the acquisition of property data company TM Group by Dye & Durham last year.
Dye & Durham, an international provider of cloud-based software and technology solutions, announced the £91.5 million purchase of Swindon-based TM Group in July 2021.
Both companies offer property finding services to clients in the UK under different brands.
The CMA said it was unaware of the deal, but launched its own investigation, where it tentatively concluded that the acquisition “significantly lessens competition in the provision of property search services”.
The CMA’s in-depth investigation examined a wide range of evidence, including strategic documents from the merging companies and a customer survey, as well as detailed information provided by customers, competitors and other industry players.
The CMA provisionally found that this evidence shows that Dye & Durham and TM Group are two of the major players in the provision of property search services in the UK and that they were in close competition before the merger.
It also shows that the combined company would be by far the largest player in the market and would face only limited competition from other suppliers.
On this basis, the CMA fears that the agreement will lead to higher prices for property search services or lower quality services, including less innovation.
This could lead to higher charges or lower service standards for people and businesses buying or selling residential and commercial properties across the UK.
In light of this loss of competition, the CMA also set out its initial view that the only effective way to resolve the issues it identified would be for Dye & Durham to sell TM Group to a suitable buyer.
Richard Feasey, chairman of the investigation group, said: “Buying and selling property can be a difficult experience for many people and one of the most important purchases most of us make. let’s do.
“We need to make sure the fees for research reports are competitive and that we continue to see innovation in digital services to make the process easier and faster.
“By reducing competition in an already concentrated market, we found that Dye & Durham’s purchase of TM Group could increase costs and reduce the quality of these services.”