The UK’s competition regulator has served an enforcement order against Viagogo and StubHub banning them from taking any action that could lead to the integration of the two businesses, pending the regulator’s investigation of their proposed merger.
Viagogo announced it had agreed a $4 billion deal to buy StubHub from its current owner eBay last November. Given Live Nation’s Ticketmaster bailed on secondary ticketing in Europe in 2018, a combined Viagogo/StubHub would be hugely dominant in the for profit ticket resale domain in the UK.
Such a deal would likely raise competition law concerns even without Viagogo’s reputation for being a champion rule-breaker that has long exploited consumer confusion to sell tickets at hiked up prices, then treated many of those confused customers with contempt.
The Competition & Markets Authority announced in December that it would investigate the proposed merger. That was before it called out StubHub – which has always spun itself as the more obedient of the ticket resale sites – for breaching a bunch of consumer rights laws.
With the enforcement order issued on Friday, the CMA is seeking to ensure that Viagogo and StubHub remain distinct businesses in the UK until its investigation is complete. Basically the regulator wants to ensure that if it ultimately decides to block the merger – or seeks remedies to reduce the negative impact of the transaction – the Viagogo and StubHub businesses aren’t already so integrated that the block or remedies would be hard to enforce.
In its order, the regulator said it “has 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 Viagogo and StubHub] companies ceasing to be distinct”. To ensure that that doesn’t happen, bosses of the two companies will have to report to the CMA on a fortnightly basis, starting on 21 Feb, to prove that they remain distinct separate businesses.
Responding to the order, Viagogo’s Cris Miller told reporters his company was happy to comply with the CMA’s request. He said: “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”.
“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”, he added. “We will continue to work closely with them through this process, with a view to successful completion soon”.
A StubHub spokesperson said more or less the same, though added that they were confident the merger would go ahead as planned and on schedule. They said: “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”, they went on, “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”.