Switzerland-based secondary ticketing company viagogo is being forced to sell all of StubHub’s business outside North America due to competition concerns identified by the UK’s Competition and Markets Authority (CMA).
viagogo acquired eBay’s ticketing division StubHub for $4.05 billion in cash in February 2020 and an investigation carried out by the CMA has concluded that the proposed merger between the two firms “will lead to a substantial reduction in competition in the secondary ticketing market in the UK”.
The CMA is now forcing viagogo to sell StubHub’s business outside North America, which means that the StubHub international business, including in the UK, will need to be independently owned and run by a separate company, with no input from viagogo.
The UK’s competition authority also states that it will need to approve the buyer of the business before any sale.
In addition, the CMA states that it will determine key conditions of the sale, such as the right of the purchaser to use the StubHub brand for the next 10 years.
Today’s decision was reached by a group of independent CMA panel members, after looking at evidence from customers, competitors and consumer groups.
According to the the CMA, the evidence shows that the two ticketing firms compete closely against each other in the UK’s secondary ticketing market and have “no significant competitors”.
Together, viagogo and StubHub have a combined market share of more than 90% and are the No.1 and No.2 players respectively in the UK’s secondary ticketing sector.
In addition to the UK, StubHub’s ticketing business operates in a number of territories including North America and several countries in Europe, South America and Asia.
“Creating a fully independent StubHub international business will maintain competition in the UK and help ensure that the users of these ticketing platforms don’t face higher prices or poorer quality of service.”
Stuart McIntosh, CMA
Stuart McIntosh, Chair of the CMA inquiry group, said: “The CMA has focused on ensuring competition in this sector works best for UK consumers.
“After examining all the options, including unwinding the merger in full, the evidence shows that viagogo selling StubHub’s international business will resolve our competition concerns, effectively and proportionately.
“Creating a fully independent StubHub international business will maintain competition in the UK and help ensure that the users of these ticketing platforms don’t face higher prices or poorer quality of service.”
“Tackling this hugely controversial $4bn merger was always going to be tough for regulators, and we welcome the CMA’s hard work during this investigation.”
Adam Webb, FanFair Alliance
Adam Webb of FanFair Alliance (an organization that campaigns against industrial-scale online ticket touting), said: “Tackling this hugely controversial $4bn merger was always going to be tough for regulators, and we welcome the CMA’s hard work during this investigation.
“Going forward, the most pertinent question will be the identity of potential buyers. Practically all of StubHub’s value is in the company’s North American operation.
“Aside from the acquisition costs, anyone wishing to operate a successful uncapped ticket resale business in the UK would require two things: significant relationships with large-scale ticket touts to supply inventory, and deep enough pockets to outspend Viagogo on Google search advertising.
“That might be good for Google, and it might be good for ticket touts. But we need a conclusion that’s good for UK consumers, and stops them being ripped off.”
The UK’s Competition and Markets Authorit launched a Phase 1 inquiry into viagogo’s proposed $4.05 billion cash acquisition of eBay’s ticketing division StubHub in December 2019.
In June 2020, after completing an initial Phase 1 investigation into the merger, the CMA raised concerns about the loss of competition in the country’s secondary ticketing sector that could be brought about as a result of the merger.Music Business Worldwide
