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Viagogo-StubHub acquisition complete but merger on hold

WORLD -
World News
February 21, 2020

CONTROVERSIAL RESALE website Viagogo has completed its acquisition of StubHub from eBay, but is still forbidden from merging the two companies by authorities in the UK.

Protests to the country’s competition watchdog the Competition & Markets Authority (CMA) after the $4.05 billion takeover was announced in December, prompted it to investigate the impact of the deal, and invited input from interested parties.

The CMA has since served an Initial Enforcement Order (IEC) ordering the two companies to halt their merger while it continues its preliminary inquiry.

The IEC was served on “reasonable grounds for suspecting that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in [the two firms] ceasing to be distinct.”

The order bans the companies from taking any actions which may lead to the integration of their businesses.

It also requires the CEO of each firm to provide the CMA with statements confirming compliance every two weeks.

“We are pleased to confirm the closure of our purchase of StubHub, an important milestone in our journey to deliver a more competitive customer offering,” says Viagogo MD Cris Miller, based at the Switzerland-registered company’s London office.

The two businesses, Viagogo and StubHub, will remain separate globally in line with the recent order from the CMA until their examination into the deal is complete.”

A StubHub spokesperson says, “The CMA order is consistent with the approach we have taken throughout this process and StubHub will continue to cooperate with the CMA.

“We believe that StubHub and Viagogo will be an excellent combination with significant future growth potential and will offer tremendous value to fans and partners alike.”

However, critics of both company’s practices are concerned and the implications of the takeover.

Adam Webb, campaign manager of UK-based anti ticket-touting group FanFair Alliance says, “Unlike the US, where ticket touts have a range of platforms to list on, competition for uncapped for-profit ticket resale is far more concentrated in the UK.

“In fact, following Ticketmaster’s closure of [its resale sites] Get Me In! and Seatwave, large-scale resellers are effectively limited to selling via these two sites.

“I think there’s growing realisation that allowing those two sites to merge and effectively monopolise that sector of the market as a single entity, brings with it major problems – and especially given the chequered and controversial history of Viagogo.”

The CMA will follow this preliminary inquiry with a formal Phase 1 investigation, in which they consider comments submitted.

Separate to the above, the CMA recently identified problems with StubHub’s UK website that could mean it is breaking consumer law.

As part of regulatory monitoring, the watchdog found that StubHub UK is not complying with commitments it made following a consumer law investigation in 2018.

The CMA has identified new issues as well, including failing to adequately warn people that tickets may not get them into an event and using misleading messages about ticket availability.

CMA chief executive Andrea Coscelli says, “StubHub had previously committed to make important changes to the information on its site, so anyone buying a ticket would know what they were getting before parting with their money. It’s therefore unacceptable that we have now found these concerns.

“We have demanded swift action to resolve these problems and are pleased that StubHub has said it will make changes in response. We will closely monitor the firm’s efforts and, if it does not quickly implement changes that satisfy us, we will take further action – potentially through the courts.”

Other issues the CMA identified with StubHub’s UK platform are targeting UK consumers with tickets for events listed on overseas versions of their websites, which may not comply with UK law, as well as failing to ensure people know exactly where they will sit in a venue, and failing to take sufficient steps to ensure the full addresses of business sellers are displayed.

Meanwhile, the watchdog continues its regular monitoring of Viagogo.

Elsewhere, Canada’s competition regulator has fined StubHub for misleading ticket prices. See news story on page 12.

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