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Viagogo proposed StubHub Europe sale to clear merger

Documents published by the Competition and Markets Authority detail an offer from Viagogo to sell StubHub’s European entities in a bid to relieve competition concerns

By IQ on 20 Jul 2020

CMA: Viagogo proposed StubHub Europe sale to clear merger

image © Gov.UK

The UK’s Competition and Markets Authority (CMA) has revealed that Viagogo offered to sell the European entities of StubHub, in a bid to gain the watchdog’s approval of its merger with the fellow secondary ticketer.

The CMA recently published documentation detailing in full its decision to refer Viagogo’s completed acquisition of StubHub for further investigation.

According to the CMA, a merger between the two companies would result in a substantial lessening of competition in the secondary ticketing market, leading to higher prices and limited option for fans.

Before the CMA reached its conclusion, Viagogo was able to offer undertakings to assuage competition concerns, proposing the “divestment to an upfront buyer of StubHub’s European and certain other international legal entities”.

Although the CMA notes it “generally prefers structural remedies, such as divestiture, over behavioural remedies”, the watchdog states that the proposed undertaking “does not offer a clear-cut solution to competition concerns”.

The watchdog claims “the scope” of the proposed undertaking “may not be appropriately configured to allow a purchaser to operate as an effective competitor in the UK market”, as the sale would require a carve-out from the global StubHub business, rather than comprising the divestment of a standalone business, leading to difficulties in implementation and re-platforming for the buyer.

Viagogo proposed “divestment to an upfront buyer of StubHub’s European and certain other international legal entities”

“The CMA considers that there is a significant risk that the Proposed Undertaking would not restore  competition to the level that would have prevailed absent the Merger and would not fully address the significant competition concerns identified in the SLC Decision without the need for further investigation,” reads the CMA document.

The documentation also included testimony from resellers indicating that many view Viagogo and StubHub as the strongest alternatives to each other, with “no credible alternatives” available following the merger.

“It’s fascinating to see the full text of the CMA’s decision, and the fact that even Viagogo’s main suppliers (ie high-volume ticket touts) are against this merger tells its own story,” comments Adam Webb, campaign manager of anti-tout group FanFair Alliance.

“The main thrust of Viagogo’s arguments, that their acquisition of StubHub would not create a monopoly in the UK, and their business is competing with both primary operators and capped consumer-friendly ticket resale services, is simply not backed up by evidence – least of all from Viagogo’s own internal documents.

“We now look forward to the CMA proceeding with a full Phase 2 investigation.”

IQ has contacted Viagogo for comment.

 


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