The merger of secondary ticketing companies viagogo and StubHub “could result in [UK-based] customers who buy and resell tickets losing out as a result of higher prices and fewer options”.
That’s according to the UK’s Competition and Markets Authority (CMA), which has today (June 11) raised concerns about the loss of competition in the country’s secondary ticketing sector, which could be brought about as a result of the merger.
Switzerland-based secondary ticketing company viagogo acquired eBay’s ticketing division StubHub for $4.05 billion in cash in February 2020.
Both companies have a significant presence in the UK’s secondary ticketing market. Together, they have a combined market share of more than 80% and are the No.1 and No.2 players respectively in the UK’s secondary ticket market, according to the CMA.
After completing an initial Phase 1 investigation into the merger, the CMA reports to have found that “viagogo and StubHub are close competitors in an already very concentrated market with limited alternatives”.
The CMA adds that it “is particularly concerned that the merger would raise the prices for customers, including fans, who resell and buy secondary tickets to live events”.
As part of its investigation, the CMA says that it undertook “extensive market testing” and looked at evidence from a number of third-party stakeholders including consumer groups, customers and competitors.
It also examined the two companies’ internal documents.
The CMA notes that it is “mindful of the heavy impact that the Coronavirus (COVID-19) is currently having on the live events industry”, but expects that viagogo and StubHub will continue to be prominent players in the secondary market.
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”.
For the CMA to accept these undertakings, viagogo would need to deliver “a clear-cut solution that will preserve effective competition in the UK market”.
The deal may subject to an in-depth Phase 2 investigation if viagogo is unable to provide such a solution.
“We are…concerned that this transaction could lead to customers losing out through higher prices, less innovation and a lack of real choice.”
Andrea Gomes da Silva, CMA
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.
“As we have throughout this process, we will continue to work diligently with the CMA during their review of the transaction.”
A viagogo spokesperson provided the following statement: “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.”
“We welcome today’s announcement from the CMA and hope it leads the way to an in-depth Phase 2 investigation.”
Adam Webb, FanFair Alliance
Adam Webb of FanFair Alliance (an organization that campaigns against industrial-scale online ticket touting), added: “We welcome today’s announcement from the CMA and hope it leads the way to an in-depth Phase 2 investigation.
“Viagogo remains a highly controversial business. The company has widely flouted consumer protection law in the UK, and remains under investigation in numerous other countries. Even today, amidst this terrible crisis that has decimated live music, Viagogo’s suppliers are attempting to sell tickets to cancelled events.
“Such a company, that has created thousands of consumer victims, should not be allowed to monopolise for-profit ‘secondary ticketing’. That outcome would raise significant competition concerns in the UK and threaten to reverse hard-won reforms to prevent abuses in this market.”
UPDATE: In response to the Fanfair Alliance statement above, a viagogo spokesperson told MBW: “If viagogo has confirmation that an event is officially cancelled by the event organiser, the ticket listing would be promptly removed.
“viagogo remains diligent in ensuring that all of our customers are contacted upon changes in event status.”Music Business Worldwide