SEVERAL INDUSTRY organisations have submitted evidence for a preliminary investigation into the proposed takeover of eBay-owned StubHub by controversial resale website Viagogo.
The Competition and Markets Authority (CMA) launched the inquiry into the $4.05 billion (£3.11bn) deal in December, along with an invitation to comment until the 10 January.
The government watchdog will investigate whether the deal, expected to complete by the end of March subject to regulatory approval, would result in a substantial lessening of competition within any market or markets in the UK.
Anti ticket-touting campaign group FanFair Alliance was the first to urge the CMA to investigate the takeover and its potential implications for consumers and the live event industry.
“A merger of the two, would potentially leave a single market-dominant platform – there would be no competition,” writes FFA campaign manager Adam Webb in a letter to the CMA.
“This would, we believe, inevitably lead to even higher fees for consumers, and an even greater dominance of search and social media advertising – increasing the risk of consumers being led needlessly towards inflated tickets in the secondary market, and away from authorised primary ticket agents.
“While there are other smaller less significant B2C secondary platforms operating in the UK – for example Gigsberg and Vibe Tickets – these are populated by resellers already active on Viagogo and StubHub.”
The Association of Independent Festivals (AIF) has been campaigning on the issue of for-profit secondary ticketing since 2014 and set-up the Ticket Trust, an ethical ticket exchange.
“If this merger was to go ahead, it would undo all the positive progress that has been made by FanFair Alliance and other parties in the last few years,” AIF CEO Paul Reed tells LIVE UK.
“The UK is hosting more consumer-friendly ticket resale services than anywhere else in the world, but you can’t compare Viagogo with all the other emerging resale sites.
“Viagogo dominates Google listings but is masquerading as an official resale site, when the way they operate shows flagrant disregard for any sort of regulation.
“We’ve had some absurd situations where festival customers have paid five times more than face value for festivals that are still on sale through legitimate primary channels, because Viagogo is the first site that pops-up on Google. Festival promoters are powerless to do anything.
“Google advertising and search is essentially Viagogo’s oxygen supply and without it they don’t have a viable marketing platform.
“This merger would reduce that market to one single, all-powerful player and I think regulators should be extremely concerned about that.”
The Music Managers Forum (MMF), which represent around 700 artiste managers, has also submitted evidence to the CMA, with MMF CEO Annabella Coldrick citing StubHub and viagogo as “hugely controversial companies”.
“Their business practices run counter to developments in the UK market which is embracing capped, consumer-to-consumer ticket resale. By contrast, Viagogo and StubHub are dependent upon large-scale commercial resellers. The dynamics are completely different,” Coldrick tells LIVE UK.
“Therefore, a merger would effectively offer Viagogo a monopoly in for-profit secondary ticketing. They would have no competition, and given their history of bad practice and legal non-compliance, that would likely lead to further abuse of consumers and further market distortions.”
Based on the evidence presented, the CMA will decide whether to launch a formal Phase 1 investigation.
In August last year, it suspended preparations for contempt of court action against Viagogo, following its failure to comply with consumer protection laws.
Following that, in November, the company’s suspension from Google Ads was quietly lifted, just four months after being imposed.
Viagogo founder and CEO Eric Baker also co-founded StubHub, but left before his then partner sold the business to eBay for $310 million (£238m) in 2007.