The Competition and Markets Authority (CMA) has temporarily blocked Viagogo’s takeover of rival site StubHub, saying the resulting business would dominate the ticket resale market.
The planned £3 billion deal — which Viagogo had moved forward with in spite of a warning from the CMA — is now reportedly on hold.
The chair of the CMA inquiry group, Stuart McIntosh, reportedly raised concerns about Viagogo and StubHub having more than 90% of the market share.
“We are therefore concerned that their merger could lead to secondary ticketing customers facing higher fees and lower quality services,” McIntosh said.
The CMA gave Viagogo until 12 Nov. to make its case, The Guardian reported. The watchdog will issue its final decision on the deal by 9 Dec..
Viagogo and StubHub Face Criticism
Musicians and MPs have criticised both Viagogo and Stubhub for allegedly misleading consumers and using ticket touts to profit off fans.
Music industry groups reportedly alerted the CMA that they were concerned about the potential power of the combined company, especially because of those allegations.
In a 2019 letter to the CMA, the group FanFair Alliance said the deal could create a monopoly over ticket resale in the U.K., with “significant and damaging implications” for the industry.
After Ticketmaster closed its GetMeIn and Seatwave due to negative publicity and underperforming finances, StubHub became Viagogo’s main competitor.
FanFair Alliance said the takeover’s effect on competition, combined with Viagogo’s questionable track record with consumers, should give the CMA cause to act.
In its letter, the group reportedly cited Viagogo’s “persistent reluctance to follow consumer protection law” until it was forced to and said the company created “consumer victims” by causing people to pay higher-than-expected prices; people also purchased tickets through Viagogo only to be turned away a the event venue.
FanFair Alliance also pointed out Viagogo had failed to attend a pair of parliamentary select committee hearings, according to The Guardian.
Viagogo and StubHub Hit With Class Action Lawsuits
Viagogo is not only fighting battles in the U.K.
FanFair Alliance told The Guardian the ticket resale company is involved in legal proceedings in Europe and in action brought by consumer groups in Australia and New Zealand.
In the United States, a consumer has filed a class action lawsuit against Viagogo, alleging the company has failed to provide refunds to consumers who bought tickets to events that were later cancelled due to the coronavirus pandemic.
The plaintiff in that case says Viagogo did not contact her about the cancellation; she only learned about it through the Facebook page of the music group she had tickets to see.
She claims she made many attempts to contact the company between April and July, but was told the event was only “rescheduled” and that no refund would be issued because “it was decided that tickets which had already been issued would remain valid for the new dates.”
StubHub is involved in similar litigation.
StubHub Canada Ltd. and StubHub Inc. face a class action lawsuit in Canada that alleges those companies also failed to provide refunds on tickets to events cancelled or likely to be cancelled due to COVID-19.
That class action lawsuit argues Canada’s consumer protection laws and the terms of their agreements with StubHub entitle consumers to a prompt refund.
The plaintiff in the Canada class action lawsuit says consumers have paid premium prices and fees to StubHub because of the company’s FanProtect Guarantee, which ensured they would be refunded in the event of a cancellation or if the purchased tickets weren’t accepted for entry at the venue.
Meanwhile, StubHub has argued the plaintiff’s event was only postponed, not cancelled, so a refund is not appropriate.
Trouble On Many Continents
Earlier in 2019, Google had banned Viagogo from paying for the privilege of appearing at the top of search results, which reportedly dramatically dropped its web traffic. However, that decision was eventually reversed after the company committed to clarifying the information consumers see.
The ban remains in place in many countries in which Viagogo is still subject to regulatory action, The Guardian reported — namely, the Czech Republic, Sweden, Finland, Hungary, Japan, Slovakia and Taiwan.
In addition to FanFair Alliance, consumer watchdog Which? called for the CMA to investigate Viagogo’s planned takeover, and some in the music industry were considering going to the EU’s Competition Commission in an effort to block the takeover.
“Viagogo expects the market regulator to look at this deal as they would with any deal of this size and we will be working with them collaboratively on that as required,” a Viagogo spokesperson told The Guardian in 2019.
FanFair Alliance campaign manager Adam Webb told The Guardian last month the takeover “would bestow a hugely controversial business monopoly status in this country, and risk unpicking some significant progress made over recent years to clean up the secondary ticketing market.”
The CMA’s decision about the takeover is related to marketplace competition, it is also allowed to take into consideration each firm’s quality of service and how combining the two might affect that, The Guardian reported.
Have you ever purchased tickets through StubHub or Viagogo? Do you think the takeover is a good idea? Tell us about your experience in the comments below.
Check back daily for the most recent U.K. class action lawsuit and consumer protection news.
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