Topcashback and Quidco merger 'may lead to lower cashback rates'
Topcashback's proposed purchase of Quidco may lead to lower cashback rates for shoppers, the competition watchdog has said.
Topcashback and Quidco have long been the top two firms in our Top Cashback Sites guide, and in November Top Online Partners Group, which owns Topcashback, and Maple Syrup Group, which owns Quidco, announced they had agreed to form a new single group, CB Group Holdings.
The Competition and Markets Authority (CMA) has been carrying out an initial investigation into the proposed deal since November, and now says it has concerns that a merger could decrease the amount of cashback paid to shoppers.
Quidco and Topcashback now have until 14 January to offer a solution to the CMA's concerns, or the merger will be referred for an in-depth second phase investigation.
What can the competition watchdog do?
The CMA can take a number of actions when a merger is suggested, including blocking it from going ahead.
Although the CMA only focuses on competition in the UK market, the remedies it offers after investigations such as this sometimes affect businesses at a global level.
What do Topcashback and Quidco say?
A Topcashback spokesperson said: "While it's a shame we didn't get sign off today, it isn't unexpected we would go into phase two, especially considering the complexities of our industry.
"In terms of what this means for us now, as before, we'll continue offering the best service and deals to our members as we always have done. We'll also be working closely with the CMA during its continued review and while we don't want to speculate too much on the outcome, we remain optimistic."
A Quidco spokesperson said: "The deal was voluntarily submitted to the CMA for review, as we want to be as diligent and compliant as possible in this process. While the CMA is reviewing the deal, it is business as usual for us. We are optimistic, but we don't want to speculate on the outcome at this stage."