UK Competition Regulator Opens Preliminary Investigation Into Viagogo-StubHub Merger
British watchdog the Competition and Markets Authority (CMA) has opened a preliminary investigation into Viagogo's planned $4 billion acquisition of StubHub over fears that it may lessen competition…
LONDON – British watchdog the Competition and Markets Authority (CMA) has opened a preliminary investigation into Viagogo’s planned $4 billion acquisition of StubHub over fears that it may lessen competition in the live and ticketing industry.
The CMA has given interested parties until Jan. 10, 2020 to comment on the merger, after which it will make a decision on whether to begin a formal phase 1 inquiry.
The CMA is an independent non-ministerial government department that has the jurisdiction to examine mergers, including acquisitions and joint ventures, where two or more companies cease to be distinct.
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Its rules dictate that in order to open a formal investigation, either the U.K. turnover of the acquired business needs to exceed £70 million ($93 million), or the two enterprises supply or acquire at least 25% of the same goods or services supplied in the U.K. and any merger would increase that share of supply.
According to financial records filed at Companies House, StubHub UK Limited’s turnover was £12.9 million ($171. Million) in 2018, resulting in a profit of £850,000 ($1.1 million) before taxation. Viagogo, which is based in Switzerland, has not filed any financial records in the U.K. and its earnings are not a matter of public record.
CMA investigators will be paying particular attention to how a Viagogo-StubHub would transform the secondary ticketing market in the U.K.
Unlike in North America, Viagogo and StubHub are the only two major “for profit” secondary ticket platforms still operating in Britain after Ticketmaster shuttered its two resale sites, GetMeIn and Seatwave, in late 2018 and replaced them with a fan-to-fan ticket exchange.
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Ticketing campaign group the FanFair Alliance believes that if Viagogo were to merge with StubHub it would give the combined company almost complete control of the U.K. “for profit” secondary market.
“Aside from the persistent controversies surrounding these platforms, both of which are almost wholly dependent upon large-scale commercial ticket resellers, a merger between Viagogo and StubHub would have profound and damaging impacts for UK audiences and music businesses,” says Adam Webb, campaign manager for the FanFair Alliance, who raised a formal complaint about the merger with the CMA at the start of December.
Viagogo has previously stated that it “expects the market regulator to look at this deal as they would with any deal of this size and we will be working with them collaboratively on that as required.”
When the Viagogo-StubHub merger was first announced Nov. 25, Viagogo founder/CEO Eric Baker said the deal would give buyers “a wider choice of tickets, and sellers will have a wider network of buyers.”
Earlier this year, the CMA ended a long-running court action against Viagogo after the company made a number of changes to meet U.K. consumer law.
The controversial ticketing service has also been the subject of reviews by the Digital, Culture, Media and Sport (DCMS) committee and Advertising Standards Authority (ASA), and twice failed to appear before a British Parliamentary hearing into live music and the secondary sector.
Outside the United Kingdom, Viagogo has been the subject of legal actions and consumer group investigations in Australia, France, Switzerland and New Zealand, following a wave of consumer, touring artist and promoter complaints.