By Chris Cooke | Published on Friday 26 June 2020
The UK’s Competition & Markets Authority yesterday announced that it was launching a more in-depth phase two investigation into Viagogo’s acquisition of StubHub. The regulator said Viagogo had not, as yet, addressed its concerns about the transaction.
The often controversial secondary ticketing company Viagogo announced in November that it was buying rival StubHub from its previous owner eBay in a $4 billion deal. The transaction was completed in February, but by that point the CMA had already confirmed it was looking into the merger, meaning that the two companies couldn’t formally come together within the UK (so much so they have stayed separate worldwide).
A more formal phase one investigation into the deal was then launched by the CMA in April. Earlier this month, the regulator said it was giving Viagogo five days to address various concerns that had been raised during that process, adding that a “clear cut solution” was required.
With no such clear cut solution being proposed and the concerns therefore remaining, a more in-depth phase two investigation will now take place, which could result in the CMA demanding remedies or blocking the UK side of the deal entirely.
If you’d prefer that update expressed with some quality CMA legalese, here you go: “Pursuant to section 73A(1) of the act, on 18 Jun 2020, the merging parties offered undertakings to the CMA that might be accepted by the CMA under section 73(2) of the Enterprise Act 2004. Following an assessment of these undertakings, the CMA considers that the proposed undertakings offered by the parties are not a clear-cut solution to the competition concerns identified as arising from the merger”.
“Accordingly”, it goes on, “the CMA has decided not to exercise its discretion under section 73(2) of the act to accept undertakings in lieu of reference. Therefore, pursuant to sections 22(1) and 34ZA(2) of the act, the CMA has decided to refer the merger to its chair for the constitution of a group under Schedule 4 to the Enterprise And Regulatory Reform Act 2013 to conduct a phase two investigation”.
The anti-touting campaign group FanFair welcomed the news of a phase two investigation. Campaign Manager Adam Webb said: “Over recent years, there have been major steps forward in the UK to eradicate the bad practices of sites like Viagogo and StubHub and those of the large-scale ticket touts who dominate their supply chain. They have agreed to reforms grudgingly. It took a court order and escalated warnings from the CMA to force Viagogo’s compliance with a whole range of consumer protection laws. The company’s treatment of UK audiences has been scandalous”.
“Even in the midst of the COVID-19 crisis, the thought of such a business monopolising ‘for profit’ secondary ticketing remains highly problematic”, he went on. “Viagogo’s predatory marketing practices and business model continue to endanger audiences, and its $4.05bn acquisition of StubHub raises acute competition concerns, particularly in the UK. Earlier this month, Viagogo was required to deliver a clear-cut solution to address these concerns. They have failed to do this. FanFair Alliance therefore welcomes the CMA’s decision to refer the merger for an in-depth investigation”.
Viagogo and StubHub told Reuters that they would continue to work with the regulator on the more in-depth phase two review, adding: “During this period, the StubHub and Viagogo brands and operations will continue to be held separate as agreed with the CMA”.