UK Edition
Viagogo's £3.2bn deal for eBay's Stubhub investigated by competition watchdog
The CMA inquiry compounds issues for companies which have been hit hard by the coronavirus crisis
The competition watchdog has launched an investigation into ticket reseller Viagogo's $4.05bn (£3.2bn) acquisition of eBay's ticketing unit Stubhub.
The Competition and Markets Authority (CMA) had flagged concerns in December about whether the deal, which was completed in February, was "expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services".
"The deadline for the CMA to announce its decision whether to refer the merger for a Phase 2 investigation is therefore 11 June 2020," the regulator said, adding that it issued a notice to the parties on the launch of the merger inquiry on Tuesday.
The Guardian had earlier reported that the CMA could launch a second inquiry that may lead to the UK element of the deal being blocked altogether.
A spokesperson for Viagogo said,"we welcome the formal start of the phase 1 review by the CMA. We will continue to work closely with them and demonstrate the benefits of the merger for consumers.”
eBay did not respond to a request for a comment by Reuters.
The regulator had also said earlier this year that StubHub failed to adequately disclose to customers that transactions may not ensure entry into an event as some venues did not honour resold tickets.
The CMA had ordered StubHub to make changes to its website after the British ticket reseller was found to be misleading people about ticket availability. This came a few months after Viagogo was criticised for similar violations.
Revenues at both companies have been harmed as the coronavirus has forced the cancellation of concerts and sporting events all over the world.
StubHub has also been hit with a class-action lawsuit worth about $5m which is demanding that the company offers customers full refunds for cancelled events, after the reseller asked them to accept credit worth 120 per cent of the cost of the tickets.