Online marketplace eBay is facing an investigation by the UK markets watchdog over the proposed £7bn sale of its advertising arm to a Norwegian firm.

The Competition and Markets Authority (CMA) has launched a probe into eBay’s proposed £7bn deal with online classifieds business Adevinta as part of a crackdown on digital monopolies, The Mail on Sunday reported. 

The ecommerce giant is looking to offload its online ads business, which includes popular websites such as Gumtree and Motors.co.uk, for £1.8bn in cash and a 44% stake in the combined firm.

The deal would make eBay the largest shareholder in Adevinta, which hosts online ads in 20 countries and had revenues in excess of £1.3bn last year. 

The CMA has until February 16 to finish the first part of its investigation into whether the deal would substantially lessen competition. 

The Mail on Sunday reported that in launching the probe, the CMA plans to “rein in digital giants and promote competition in digital advertising”. It is poised to set up a digital regulator focusing on stopping “tech titans from swallowing up” smaller firms.

The new Digital Markets Unit will also draft and enforce a code of conduct on large tech firms such as Facebook, Google and Amazon. 

This year is shaping up to be crucial for global governments’ efforts to curtail in the power of large technology companies. 

Speculation continues to mount in the US that Facebook could be broken up after 46 states launched a case claiming it acquired competitors in a “predatory” manner. Google also faces antitrust cases in the US.

China has put pressure on Alibaba entrepreneur Jack Ma to break up his business after regulators started investigations into the retail firm and fintech business Ant Group