The UK’s competition watchdog has raised concerns about the merger between Viagogo and StubHub citing potential price hikes and fewer ticket options for consumers.
The Competition and Markets Authority (CMA) said today (Thursday) it is concerned that the “loss of competition” brought about by the merger could result in customers who buy and resell tickets “losing out as a result of higher prices and fewer options.”
StubHub’s parent company eBay completed the sale of the secondary ticketing provider to Viagogo for $4.05bn in cash in February. Around the same time the CMA ordered a halt to any integration between the companies until it completes its investigation into the merger.
The two companies’ combined market share accounts for more than 80 per cent and they are the top two players respectively in the UK.
As part of its investigation, the CMA said it undertook market testing and looked at evidence from a number of third-party stakeholders including consumer groups, customers and competitors. It also examined the companies’ internal documents.
Andrea Gomes da Silva, CMA’s executive director for markets and mergers said: “Viagogo is already the largest secondary ticketing company in the UK by some considerable margin and has purchased an established rival, with no other significant competitors in the market.
“We are therefore concerned that this transaction could lead to customers losing out through higher prices, less innovation and a lack of real choice.”
Following today’s announcement, Viagogo now has five working days to address the CMA’s concerns by offering remedial undertakings in lieu of a reference to a ‘Phase 2’ investigation.
Viagogo would need to deliver a “clear-cut solution that will preserve effective competition” in the UK market. If Viagogo is unable to do so, the deal will be referred for an in-depth (Phase 2) investigation.
A StubHub spokesperson said: “We will continue to work cooperatively with the CMA as they continue with their review of the transaction. During this period, the StubHub and viagogo brands and operations will continue to be held separate as agreed with the CMA.
“We look forward to the day when the companies can combine to provide consumers wider access to their favourite events.”
A viagogo spokesperson added: “As we have throughout this process, we will continue to work diligently with the CMA during their review of the transaction. We remain committed to our belief that the combination of the two companies is a good move for customers worldwide.”