CMA Takes Issue With StubHub/Viagogo Merger In UK

viagogo has acquired StubHub from eBay
– viagogo has acquired StubHub from eBay
Selling point: $4.05 billion.

The UK’s Competition and Markets Authority has “provisionally found competition concerns” during its in-depth investigation of viagogo’s StubHub acquisition.
The CMA found, that the merger has resulted in “the creation of a relevant merger situation, and that the creation of that situation has resulted or may be expected to result in a substantial lessening of competition (SLC) in the supply of uncapped secondary ticketing platform services for the resale of tickets to UK events.”
Some highlights from the CMA’s summary of its provisional findings, which can be found on its website:
The watchdog found that both viagogo and StubHub are competing closely in the UK, where, based on their 2019 sales, their joint share of the market is 90-100%, with an increment of 30-40% as a result of the merger.
At the time of the merger, StubHub demonstrated annual growth, “which represents a considerable threat to viagogo’s UK business,” according to the CMA.
Because both platforms allow for uncapped ticket resale, they’re the primary choice of ticket resellers aiming to make a profit. Most of the big resellers CMA spoke to as part of its investigation said they used the platforms as substitutes – not as complement as both viagogo and StubHub would maintain – indicating that they indeed competed for the same customers.
This, according to the CMA, “would incentivise the Parties to set price and non-price terms that take into account the competition between them.”
It continues, “Overall, we have provisionally found that the Parties are close competitors and have been competing for resellers and buyers, and absent the Merger can be expected to continue to compete with each other to a substantial degree.”
The CMA found that competition from other uncapped ticket resale platforms like Gigsberg, as well as the capped resale platforms like Twickets and the primary sellers own resale platforms was very low.
Hence the conclusion that the merger would significantly lessen competition in the market. 
As the CMA emphasises, “this is not our final decision.” Interested parties can submit their take on these provisional findings by Nov. 12.
What is more, the CMA has published a “notice of possible remedies,” or “measures required to remedy the SLC [substantial lessening of competition] that we have provisionally found and/or the resulting adverse effects.” 
Seeing that the CMA generally prefers structural remedies, including divestiture or prohibition, it would please the authorities most if the rivalry between both viagogo and StubHub was restored, ie “the full divestiture of either StubHub or viagogo,” or “the divestiture of part of StubHub or viagogo.”
In other words, viagogo could sell StubHub again, which would make a prohibition of the merger unnecessary.
A source with inside knowledge on the matter told Pollstar, that ‘CMA have confirmed that they’re talking about global divestiture, not just UK.”
A viagogo spokesperson told Pollstar, “Our intention remains to provide event goers in the UK with the best possible service, and whilst we disagree with the provisional conclusion that the deal would reduce competition, we look forward to working with the CMA to deliver a comprehensive solution which addresses their concerns.”
Adam Webb, campaign manager for FanFair Alliance, the UK’s campaign group against the for=-profit release of tickets, provided Pollstar with the following comment:
“FanFair Alliance welcomes today’s provisional findings. Though poorly-timed and focussed predominantly on the U.S. market, Viagogo’s $4.05 billion acquisition of StubHub raises acute competition concerns in the UK. 
“We are pleased the CMA has recognised this. Ultimately, the merger would bestow a hugely controversial business monopoly status in this country, and risk unpicking some significant progress made over recent years to clean up the secondary ticketing market. 
“We now look forward to submitting further views to the CMA about both their findings and potential remedies.”
The original acquisition was made through PUG LLC, a subsidiary of Pugnacious Endeavours, Inc., which is the trading name of viagogo. The acquired StubHub businesses, formerly owned by eBay Inc., include StubHub, Inc., StubHub (UK) Limited, StubHub Europe S.à.r.l., StubHub India Private Limited, StubHub International Limited, StubHub Taiwan Co., Ltd., StubHub GmbH, and Todoentradas, S.L.