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Competition regulator reveals Viagogo offered to sell StubHub’s European assets

By | Published on Tuesday 21 July 2020


The UK’s Competition & Markets Authority last week published more information about its decision to instigate a fuller phase two investigation into the acquisition of StubHub by Viagogo. It confirmed that among those concerned about the deal are the touts who sell tickets on the two companies’ resale sites, and that Viagogo had proposed to sell-off StubHub’s European assets in order to allay the regulator’s concerns.

Viagogo announced it was buying rival StubHub from its previous owner eBay in a $4 billion deal last November. The transaction was completed in February, but by that point the CMA had already confirmed it was looking into the merger.

Then last month the regulator said it would begin a longer phase two investigation unless Viagogo could come up with a “clear cut solution” to the issues it had raised with the deal. The phase two investigation then began – because seemingly no clear cut solution had been found.

That a combined Viagogo/StubHub would totally dominate the UK secondary ticketing market is not denied. But Viagogo has argued that it also competes with the primary ticketing sellers, so there would still be plenty of competition in the market after the merger. But the CMA rejects that argument in the documents published last week.

It wrote: “While the parties [ie Viagogo and StubHub] submitted that primary ticketing platforms are a strong alternative to the secondary ticketing exchange platforms of the parties, the CMA found that such platforms are not considered close alternatives by ticket buyers and resellers”.

“In addition”, it went on, “the parties’ internal documents and third party views did not indicate that primary ticketing platforms pose a significant constraint on the parties. The CMA found that the competitive constraint from other online channels, such as Facebook, and from offline ticket sales was also limited”.

The clear distinction between primary and secondary platforms is all the more important for the resellers – or touts if you prefer – because while fans can buy tickets from both primary and secondary ticketing sites, the resellers can only sell on the latter. And those resellers fear that a combined Viagogo/StubHub could use its market dominance to make reselling tickets less lucrative.

Summarising the concerns expressed by the touts, the CMA document notes that “a significant number indicated that the merged entity would have a monopoly over the secondary ticketing market in the UK”. And one reseller, it went on, “expressed concern that the merged entity would be able to dictate terms, resulting in worse payment terms and higher fees for resellers and price increases for customers”.

Elsewhere the CMA confirmed that Viagogo did in fact propose a possible solution to avoid a phase two investigation: the “divestment to an upfront buyer of StubHub’s European and certain other international legal entities”.

At first glance, that seems like a pretty big concession on Viagogo’s part. Although it’s no secret that Viagogo’s main interest in StubHub is its US business, America being the major market where Viagogo is not a major player, and where so far there have been fewer attempts to restrict the resale of tickets online through new rules and regulations.

The CMA ultimately concluded that that proposal was not sufficiently “clear cut”, mainly because of concerns that a standalone UK StubHub business cut off from its global parent company might struggle to operate, and therefore wouldn’t provide decent competition in the British market.

“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”, the CMA stated, “and would not fully address the significant competition concerns identified … without the need for further investigation”.

Commenting on last week’s CMA documents, Adam Webb from anti-touting campaign FanFair said: “It’s fascinating to see a 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 it’s own story”.

He went on: “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 two investigation”.