eBay Depop Deal Faces UK Probe As Delay Raises Costs, Risks
The UK Competition and Markets Authority has officially started the clock on its review of eBay's planned acquisition of Depop from Etsy, as regulatory scrutiny and delays could make the deal more expensive whether it ultimately closes or falls apart.
The CMA began gathering information in May 2026, seeking comment from interested parties on how the merger might impact competitors and consumers in the resale fashion market if it is allowed to move forward.
Now the competition watchdog has accepted the formal merger notice from eBay and Depop, opening an official Phase 1 review with a deadline of August 6, 2026 to decide whether to approve the deal or refer it for a deeper Phase 2 investigation.
The original announcement in February had eBay agreeing to acquire Depop from Etsy for approximately $1.2 billion in cash, with closing initially expected in Q2 2026.
Etsy later updated that timeline in Q1 earnings, saying the companies now expect the sale to close by the end of Q3 as regulatory reviews in Australia and the UK remain pending.
If the deal closes, the final purchase price could rise above the headline $1.2 billion because Etsy says the price will be adjusted, up to a specified cap, for certain investments Etsy and Depop may make in the business before closing.
If the deal fails because required regulatory clearances are not obtained, eBay could owe Etsy a termination fee and a Business Disruption Fee under the original purchase agreement and a new letter agreement signed on May 21, 2026.
Liz Morton
According to Etsy’s recent 8-K, the original purchase agreement requires eBay to pay a $90 million fee if the deal is terminated because certain regulatory clearances are not achieved.
The new letter agreement adds a separate Business Disruption Fee which may be payable by eBay if the purchase agreement is terminated under certain circumstances after specific dates.
If the acquisition is called off on or before June 15, 2026, no Business Disruption Fee would be owed.
If termination occurs after June 15 and on or before June 30, the fee rises to $34 million. After June 30 and on or before July 15, the fee increases to $68 million. After July 15 and on or before July 31, the amount would be $102 million. If termination occurs after July 31, the maximum fee would be $136 million.
That could put eBay’s total exposure at least as high as $226 million if the deal fails after July 31 because required regulatory clearances are not obtained, made up of the original $90 million regulatory termination fee plus the new $136 million Business Disruption Fee.
However, the fees are subject to important conditions and exceptions. The Business Disruption Fee will not be payable if the deal closes, and it also will not apply in certain termination scenarios tied to seller fraud or Etsy willfully breaching specified obligations under the purchase agreement.
The regulatory reviews also come as eBay is building a broader pre-loved fashion portfolio, including Tise, which was the first investment funded by eBay Ventures in 2022 before being acquired by eBay in 2025 as part of the company's broader consumer to consumer, pre-loved fashion strategy.
Liz Morton
It then quietly expanded into Australia earlier this year with a soft launch promoted by influencers, raising questions about whether regulators have a complete picture of eBay's growing secondhand fashion footprint in the region as they assess the Depop acquisition.
Liz Morton
Tise follows a similar model to Depop, advertising fee-free selling while charging a service fee to buyers.
eBay has also been moving toward similar fee structures for consumer sellers in key international markets, including Germany, the UK and Australia, further increasing the importance of how regulators define the relevant competitive market.
Liz Morton
The Depop deal has also been impacted by GameStop CEO Ryan Cohen's unsolicited bid to buy eBay, which has brought new attention to eBay's M&A practices.
Liz Morton
eBay formally rejected the offer, but GameStop has continued to increase its position in the company while Cohen has been publicly pressing his case to shareholders by criticizing current eBay management, board oversight, operational execution, and governance failures.
Cohen has also said he plans to take the matter directly to shareholders, setting up the possibility for a protracted fight for the future of the platform.
That fight may not have a direct impact on the current regulatory status of the Depop acquisition, but it could increase scrutiny of how eBay is allocating capital and whether the company’s aggressive push into pre-loved fashion is the right strategic bet at this moment.
Regulators are already reviewing whether eBay should be allowed to take a larger role in resale fashion, while sellers are being pushed toward more buyer fees, shipping mandates and marketplace control.
Now eBay may also have to convince shareholders that spending more than $1.2 billion on Depop is disciplined capital allocation at the same time Ryan Cohen is arguing current leadership has already wasted too much time and money.
With the CMA deadline now falling after the Business Disruption Fee maxes out, the longer the deal drags on, the harder that case may be to make.
If regulators push the acquisition into a deeper review, eBay may soon have to weigh how much more time, money and shareholder patience it is willing to spend trying to close the Depop deal.
