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CMA forces Viagogo and StubHub to halt merger during investigation

News
14 February 2020

THE COMPETITION and Markets Authority (CMA) has ordered controversial resale website Viagogo and eBay-owned StubHub to halt their merger while it continues its preliminary inquiry.

Protests to the CMA after Viagogo’s £3.9 billion ($4.05bn) takeover of StubHub was announced in December, prompted it to investigate the impact of such an arrangement, and it invited input from interested parties (see LIVE UK, issue 240).

The watchdog has now served an Initial Enforcement Order (IEC) due to “reasonable grounds for suspecting that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in [the two firms] ceasing to be distinct.”

The order does not prohibit the completion of the takeover, but it does ban the companies from taking any actions which may lead to the integration of the two businesses.

It also requires the CEO of each firm to provide the CMA with statements confirming compliance every two weeks.

“The requirement to hold separate the two businesses of Viagogo and StubHub is an expected part of the merger process and we fully acknowledge the importance of the CMA’s examination into the deal,” says Viagogo MD Cris Miller.

“The acquisition has received regulatory approval in the US, but the businesses will remain separate globally, allowing the CMA to complete its inquiry and consider our evidence that this deal is a positive move for fans. We will continue to work closely with them through this process, with a view to successful completion soon.”

A StubHub spokesperson says, “The CMA order is consistent with the approach we have taken throughout this process and eBay and StubHub will continue to cooperate with the CMA.

“As the CMA states in the order itself, we do not expect any impact to the planned close of the StubHub and viagogo transaction. We are on track as previously communicated to complete the sale by the end of Q1 2020. We believe that StubHub and Viagogo will be an excellent combination with significant future growth potential and will offer tremendous value to fans and partners alike.”

Adam Webb, campaign manager of anti ticket-touting group FanFair Alliance says, “Unlike the US, where ticket touts have a range of platforms to list on, competition for uncapped for-profit ticket resale is far more concentrated in the UK. In fact, following Ticketmaster’s closure of Get Me In! and Seatwave, large-scale resellers are effectively limited to selling via these two sites.

“I think there’s growing realisation that allowing those two sites to merge and effectively monopolise that sector of the market as a single entity, brings with it major problems – and especially given the chequered and controversial history of Viagogo.”

The CMA will follow this preliminary inquiry with a formal Phase 1 investigation, in which they consider comments submitted.

Separate to the above, the CMA recently identified problems with StubHub’s UK website that could mean it is breaking consumer law.

As part of regulatory monitoring, the watchdog found that StubHub UK is not complying with commitments it made following a consumer law investigation in 2018.

The CMA has identified new issues as well, including failing to adequately warn people that tickets may not get them into an event and using misleading messages about ticket availability.

CMA chief executive Andrea Coscelli says “StubHub had previously committed to make important changes to the information on its site, so anyone buying a ticket would know what they were getting before parting with their money. It’s therefore unacceptable that we have now found these concerns.

“We have demanded swift action to resolve these problems and are pleased that StubHub has said it will make changes in response. We will closely monitor the firm’s efforts and, if it does not quickly implement changes that satisfy us, we will take further action – potentially through the courts.

“As we continue to examine these consumer cases, it is now imperative that the CMA is given stronger powers to rule on whether a company has broken the law and impose fines if needed. We will continue to work with the Government on the most effective way to achieve this.”

Other issues the CMA identified with StubHub’s UK site are targeting UK consumers with tickets for events listed on overseas versions of their websites, which may not comply with UK law, as well as failing to ensure people know exactly where they will sit in a venue, and failing to take sufficient steps to ensure the full addresses of business sellers are displayed.

Labour MP Sharon Hodgson, a long-time campaigner against secondary ticket, says, “This is welcome news, but sites like StubHub and Viagogo have had far too many chances to comply with the law and have not faced any substantial consequences for misleading fans and breaking the law.

“Serious action must be taken on ticket touts through the courts and legislation needs to be tightened. The CMA needs more powers to really tackle this issue and National Trading Standards needs more funding to crack down on touts. This has been allowed to go on for too long.”

Meanwhile, the  watchdog continues its regular monitoring of Viagogo.

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