UK watchdog orders partial unwinding of StubHub-Viagogo deal
Regulator avoids total sale in favour of middle path proposed by both companies
The UK Competition and Markets Authority has ordered a partial unwinding of Viagogo’s $4bn purchase of StubHub, forcing a sale of US-based Stubhub’s international business, including that in the UK.
The CMA concluded that the deal between businesses with a combined market share of more than 90 per cent posed substantial risks to competition in the UK’s secondary ticketing market, with customers at risk of higher fees or poorer service in the future.
“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,” said Stuart McIntosh, chair of the CMA inquiry group.
The watchdog will now determine conditions of the sale of the StubHub brand, and will have to approve the purchaser. Viagogo will not have to sell StubHub’s business in North America.
The CMA provisionally blocked the merger last October, after an in-depth investigation into the deal drew competition concerns and after the companies failed to amend the terms to assuage the watchdog.
A partial sale was proposed by both companies as a middle-ground solution, although in October the CMA said it had reservations as to whether it would fully solve the competition problems.
In November the companies told the watchdog it would be “disproportionate” to demand Viagogo sell all of StubHub.
“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,” said Mr McIntosh.
“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,” said Viagogo, adding that both companies would continue to offer a “safe and secure” platform for the secondary ticketing industry worldwide.
StubHub said it was happy to have found common ground with the CMA that allowed a continued merger with Viagogo in North America, while the international business continued under new ownership. “We will continue to work with the CMA to implement the agreed-upon remedy,” it said.
The CMA has taken an increasingly aggressive approach to tech sector mergers in recent months, launching investigations into deals including Facebook and Giphy, Uber and Autocab and Nvidia’s acquisition of Arm. Its new Digital Markets Unit is also set to launch this April, with the aim of holding the power of big tech platforms in check.