THE future of Telstra's Trading Post is under a cloud after the competition regulator blocked a proposed deal with online classifieds operator carsales.com.au.
Under the deal announced in August, carsales.com.au planned to relaunch TradingPost.com.au using staff and infrastructure from its quicksales.com.au website.
The two websites would remain online as separate brands, with any item listed for sale on quick-sales.com.au also to appear on TradingPost and vice-versa.
About 100 jobs at TradingPost would have been cut had the deal proceeded.
However, the Australian Competition and Consumer Commission blocked the deal on Thursday, saying it was likely to remove a close and effective competitor of carsales.com.au.
"Trading Post is a well-established and high-profile brand for automotive classifieds advertising and provides an important competitive constraint on carsales," the ACCC chairman, Rod Sims, said in a statement.
"The proposed acquisition would significantly increase carsales' market power and competition would be substantially reduced to the detriment of automotive dealerships and private advertisers." The ACCC's statement of issues, released in October, had already raised concerns about the deal.
The chief executive of carsales, Greg Roebuck, called the decision disappointing and said the combination of quicksales and TradingPost would have brought "much needed competition to the general classifieds and auction space".
"In recent years the general classifieds and auction space has been increasingly dominated by a single overseas-owned operation," Mr Roebuck said.
"In association with quicksales.com.au, a revitalised TradingPost would have delivered stronger choice to consumers and businesses alike, as well as keeping taxes and employment in Australia."
In 2004, Telstra paid $636 million for the Trading Post Group, which at that time included newspaper publications and a number of websites.
However, the investment struggled to deliver, as auctions sites such as eBay gained in popularity.
Telstra opened the TradingPost website to online auctions in 2008, and closed the Trading Post classifieds newspaper in 2009.
It has also written down about half of TradingPost's book value.