Viagogo and StubHub Acquisition CMA Investigation Reaches New Phase

Live Music Concert

The U.K.’s Competition and Markets Authority (CMA) is concerned that the loss of competition brought about by the merger between Viagogo and StubHub could cause customers who buy and resell tickets losing out because of higher prices and fewer options.

Viagogo purchased StubHub in February 2020 from eBay. Both ticket marketplaces have a significant presence in the U.K.’s secondary ticketing market. Together, they have a combined market share of over 80% and are the number 1 and number 2 players respectively in the U.K.

After completing its initial Phase 1 investigation, the CMA found that Viagogo and StubHub are close competitors in an already very concentrated market with limited alternatives.

It is particularly concerned that the merger would raise the prices for customers, including fans, who resell and buy secondary tickets to live events.

As part of its investigation, the CMA undertook extensive market testing and looked at the evidence from several third-party stakeholders including consumer groups, customers and competitors. It also examined the companies’ internal documents.

Coronavirus Impact on Future

The CMA is mindful of the heavy impact that the Coronavirus (COVID-19) is currently having on the live events industry.

However, it expects Viagogo and StubHub will remain important competitors in the online secondary ticketing market in the longer term.

The CMA has seen no evidence that either company would be more adversely affected by the current market climate in comparison to other competitors.

“Viagogo is already the largest secondary ticketing company in the U.K. by some considerable margin and has purchased an established rival, with no other significant competitors in the market. We are therefore concerned that this transaction could lead to customers losing out through higher prices, less innovation and a lack of real choice.”


Andrea Gomes da Silva, CMA’s Executive Director for Markets and Mergers

Viagogo now has 5 working days to address the CMA’s concerns by offering remedial undertakings in lieu of a reference to a ‘Phase 2’ investigation.

For the CMA to accept undertakings, Viagogo would need to deliver a clear-cut solution that will preserve effective competition in the UK market. If Viagogo is unable to do so, the deal will be referred for an in-depth (Phase 2) investigation.

Viagogo Acquisition of StubHub – Worst Deal Ever?

Not only is the continued CMA investigation into this acquisition making it more difficult for Viagogo to reduce operating costs and streamline the business, the Coronavirus pandemic has also put the entire business under threat.

“[It’s a] spectacular misfortune to have shelled out $4 billion four weeks before the entire industry locked down,” said Eric Fuller an industry consultant to Forbes two weeks ago.

Fuller also believes there is a chance StubHub may have to file for bankruptcy, although the company in April denied this was a possibility.

However, if the CMA investigation continues to delay streamlining the two operations and also considering that live events are not coming back at any scale this year, maybe a bankruptcy by StubHub is inevitable.

In theory, even with a bankruptcy, Viagogo might see a long-term benefit if a competitor is removed from the market. But would it had been worth $4 billion?

Certainly, eBay must be happy!

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