Friends Reunited sale investigated

ITV's sale of Friends Reunited has been referred to the competition watchdog

ITV's £25 million sale of Friends Reunited has been referred to the competition watchdog for further investigation, it was announced.

The Office of Fair Trading (OFT) said it had asked the Competition Commission to look at the deal amid concerns over the effect on competition in the family tree research sector.

DC Thomson's subsidiary Brightsolid agreed to buy social networking site Friends Reunited in August with the aim of creating a major genealogy business, bringing together its findmypast.com and 1911Census.com offerings with the Genes Reunited site.

But the OFT said the acquisition would whittle down the players in the sector from three to two and "could lead to a reduction in choice and service for consumers".

Findmypast.com and Genes Reunited, which was launched in 2003 and has nine million members worldwide and more than 500 million names listed, compete with market leader Ancestry.co.uk. The OFT believes competition in the UK genealogy market is not sufficiently strong to prevent the combined firm reducing the quality or range of its services or potentially raising prices.

Amelia Fletcher, senior director of mergers at the OFT, said: "People's growing interest in researching their family tree has made this an increasingly important market. The proposed acquisition would see the three main providers of online genealogy services reduced to two and we are concerned this could lead to a reduction in choice or service for consumers. We are therefore referring the merger to the Competition Commission for a fuller inquiry."

ITV and Brightsolid said they were "disappointed" by the OFT's decision to refer the deal to the Commission. Brightsolid chief executive Chris van der Kuyl said: "We believe the merger will be good for competition and good for consumers. We look forward to demonstrating that this is a lively competitive marketplace with a multitude of free and paid offerings available to consumers. This acquisition presents an excellent opportunity to inject new focus into the iconic brands that form Friends Reunited Group."

The Competition Commission is now expected to report back by April 16 next year.