Thursday, June 11, 2020

Competition watchdog increases pressure on Viagogo-StubHub deal | The Guardian

The UK’s competition watchdog has stepped up its investigation into the proposed $4bn (£3.2bn) takeover of StubHub by rival tickets website Viagogo, piling more misery on a deal signed weeks before coronavirus brought live theatre, music and sport to a halt.

The Competition and Markets Authority said it feared a combination of two firms with 80% of the ticket resale market between them would drive up prices and reduce choice for consumers.

It has given Viagogo five days to propose “clear-cut” measures to allay its concerns, or it will move to an in-depth phase two investigation, an escalation that could result in the deal being blocked.

Viagogo has been criticised in the UK for its treatment of consumers and alliances with professional ticket touts. The deal brought together two businesses that have faced criticism for helping touts charge consumers huge mark-ups for attending Ed Sheeran gigs, watching Premier League matches or seeing Michelle Obama at the O2 in London.

Viagogo’s founder and boss Eric Baker said in February that he believed the virus was isolated to Asia.

But the subsequent spread of Covid-19 has seen the takeover, partly funded by the Walton family behind Walmart, labelled the “worst deal ever” by Forbes magazine.

StubHub, which leads the US market, is thought to be in financial difficulty due to the pandemic and has faced criticism for withholding refunds from fans who have bought tickets for cancelled events, offering them credit instead.

If Baker’s purchase of StubHub goes ahead as planned, he will bring two businesses he founded under the same umbrella, creating a ticket resale giant.

The entrepreneur co-founded StubHub, before leaving the company in a dispute with his business partner Jeff Fluhr, who later sold the company to eBay. Baker moved to London, where he set up Viagogo as a European competitor.

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The two firms are by far the leading players in ticket resale in the UK, prompting the investigation by the CMA. The regulator has previously threatened Viagogo with legal action for misleading consumers, dropping the action after the firm made changes to its website.

Viagogo said: “As we have throughout this process, we will continue to work diligently with the CMA during their review of the transaction.

“We remain committed to our belief that the combination of the two companies is a good move for customers worldwide.”


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