Business News Digital Legal Live Business Top Stories

UK competition regulator opens full investigation into Viagogo’s StubHub purchase

By Chris Cooke | Published on Thursday 16 April 2020

The UK’s Competition & Markets Authority yesterday announced it is beginning what it calls a phase one investigation into the merger of secondary ticketing companies Viagogo and StubHub. That will further delay the consolidation of the two companies, in the UK at least, and could ultimately result in the British part of the deal being constrained or scuppered entirely.

Viagogo announced plans back in November to buy rival StubHub from its previous owner eBay in a $4 billion deal. That transaction was completed in February, but the CMA had already confirmed it was looking into the merger, meaning that the two companies couldn’t formally come together within the UK. To that end, StubHub continues to operate separately from its new owner on a global basis.

The purchase of StubHub gives Viagogo a significant presence in the US market where it has traditionally been a small player in the ticket resale business. That’s attractive for Viagogo because, whereas lawmakers have been cracking down on the unofficial resale of tickets for profit in multiple other countries, in the US touting – or scalping as it’s known there – is generally still more readily accepted. Albeit with some increasing criticism in Washington.

In the UK, where Live Nation’s Ticketmaster bailed on secondary ticketing in 2018, the combination of Viagogo and StubHub makes for a very dominant player in secondary ticketing. Viagogo has argued that it also competes with the primary ticketing companies, but the merger was always likely to raise some competition law concerns.

And that’s before you consider all the criticism of the secondary ticketing companies in recent years – and especially Viagogo – which was previously taken to court by the CMA for its initial refusal to comply with UK consumer rights law.

The phase one investigation announced yesterday means that the CMA will now more rigorously scrutinise the deal. It must reach a decision by June, though that decision could be to open an even more rigorous phase two investigation. All of which means further delays to the full integration of the Viagogo and StubHub businesses.

Meanwhile, both companies are tackling the significant challenges posed by the COVID-19 shutdown of live entertainment.

That shutdown, of course, has put a great strain on the entire ticketing business as customers seek refunds for cancelled shows, while promoters investigate to what extent they are insured. The resale sites and the industrial-level touts they rely on are caught up in the middle of all that, waiting to hear what primary sites and promoters are going to do.

In the US, StubHub has already been sued over changes it made to its FanProtect Guarantee scheme regarding refunds as an unprecedented number of shows were cancelled when the COVID-19 crisis got underway.