The Competition Commission (CC) has decided to clear the proposed merger of Ticketmaster and Live Nation in the UK.
Both Ticketmaster and Live Nation operate in the live music and entertainment industry. Ticketmaster is a ticketing agent, whilst Live Nation is a live music promoter and venue operator. The companies are headquartered in the USA and, in addition to the CC inquiry, the merger is being investigated by competition authorities across the Atlantic.
Under the Enterprise Act 2002, the Office of Fair Trading may refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25% share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.
In its final report, the CC has concluded the Ticketmaster / Live Nation merger will not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the UK, including live music promotion and live music venues.
Prior to the proposed merger, Live Nation signed an agreement with Ticketmaster’s largest global competitor, CTS Eventim (Eventim), headquartered in Germany, consequent to which Eventim is planning to enter the UK for the first time. Under the agreement, Eventim will provide Live Nation with ticketing software and services, enabling Live Nation to sell its own tickets. Eventim will also be allocated a proportion of Live Nation’s tickets to sell to consumers.
The CC found the merger will make little difference to the prospects of Eventim’s success in the UK. Although Live Nation’s incentives will change as a result of the merger, the CC reports the merged entity will have little scope to affect Eventim as, under the agreement, Eventim will continue to receive a fee for every Live Nation ticket sold and Live Nation will continue to be obliged to allocate a minimum number of tickets to Eventim.
In clearing the merger, the CC’s conclusion has changed from its provisional decision, published for consultation in October, in which it expressed concern that the merger could inhibit the entry of Eventim into the UK. In response to this consultation, the CC received significant new evidence and arguments.
When considered alongside the existing evidence, the CC found, among other things, that prior to the announcement of the merger Live Nation had never intended to support Eventim’s entry into the UK beyond its obligations under the agreement, which would remain unchanged by the merger.
The CC also concluded that although the merged entity might be able to use its position as a ticket retailer, promoter and venue operator to harm its competitors in different parts of the supply chain – either by reducing the supply of its services or by supplying its services on worse terms – it would not have the financial incentive to do so. Specifically, the CC found that if the merged entity tried to harm its competitors in these ways, it would suffer significant short-term losses in pursuit of very uncertain long-term gains.
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