CMA Publishes Final Remedies For Viagogo/StubHub Merger

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

The UK’s Competition and Markets Authority (CMA) published its final report on the merger between viagogo and StubHub, and the remedies required for the deal to go through.

In a nutshell, viagogo is required to sell StubHub’s international business, which includes all StubHub business outside North America.
Viagogo had first offered to do so in November 2020, during phase two of the CMA’s merger investigation, but the proposed remedy looked much different then.
The remedy has been updated since, after taking into account the feedback from the industry about the effects the viagogo/StubHub merger would have on the ticketing business.
Under the new terms, whoever purchases StubHub’s international business will be able to use the StubHub brand outside of North America for 10 years, not the three years proposed by viagogo in November.
The UK Competition and Markets Authority
– The UK Competition and Markets Authority

CMA strengthened the provisions for the transfer of StubHub’s international management, and also improved some of the provisions for the purchaser of StubHub International concerning the access to potential ticket buyers in North America – obviously an important source of custom for StubHub and the reason viagogo wanted to exclude the purchaser from accessing them in their initial proposal.

In practice, this for example means that StubHub in North America won’t market UK events, and any North American buyer who goes onto the site looking for a UK event will be automatically redirected to the StubHub UK site.
What is more, viagogo won’t have access to Stubhub’s UK platform or software, and will only have customer transaction data relating to buyers and sellers based in the USA.
The CMA wanted to ensure the long-term separation of the ticketing platform as well as buyer and reseller data between StubHub International and North America.
Despite the CMA being responsible for the UK, the remedy will impact all countries StubHub operates in outside of North America, which, aside from the UK, includes several countries in Europe, South America and Asia.
The full report and reasonings of the CMA can be accessed on a dedicated website.
StubHub’s international business, which includes the UK, won’t become part of viagogo.

To sum it up, the CMA found that “viagogo and StubHub compete closely against each other in the UK’s secondary ticketing market and have no significant competitors. Together, they have a combined market share of more than 90% and are the number 1 and number 2 players respectively in the UK.”

A merger without remedies would have therefore resulted in a significant lessening of competition in the market, especially because other distribution channels, including “capped-price ticket exchanges, classified ad sites like Gumtree, social media and the primary ticketing market itself,” aren’t strong enough to compete with the merged entity, in the CMA’s view.
“These would not be able to stop the merged business from pushing up fees or reducing quality of service,” the CMA stated in a press release.
Stuart McIntosh, chair of the CMA inquiry group, commented: “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,” he said.
Viagogo provided Pollstar with the following comment from a company spokesperson: “We are pleased to have found a remedy that is acceptable to the CMA that will allow everyone involved to move forward with clarity and certainty. 
“Importantly, both viagogo and StubHub will continue to provide a safe and secure platform for people to buy and sell tickets to events all over the world.”
Adam Webb, from the UK campaign group FanFair Alliance, first 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,” before highlighting a few issues that remain in his view:
“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.”
Sam Shemtob, director of the Face-value European Alliance for Ticketing (FEAT), commented; “We welcome the CMA’s decision, for which both it and the FanFair Alliance ought to be applauded. The requirement will help protect the live sector across Europe from a concentration of market power from the world’s largest uncapped secondary sites. 
“When live events resume, reduced capacities and social distancing will likely lead to increased demand, making it more important than ever that fans can see their favorite bands at the prices intended. FEAT is working hard to make this possible, both with regulators and by developing best practice.”