The latter would make it easier for regulators to act swiftly against illegal ticket resellers and issue sanctions where required, the CMA says in a report published Aug. 16. Among the proposed sanctions is the taking down of websites, withdrawing a businesses' right to operate, and the imposition of "substantial fines.”
The CMA’s report comes six months after it ordered Viagogo to offload its StubHub business outside of North America following an investigation into complaints of unfair competition. The secondary ticket market has already been the subject of numerous investigations and court orders.
But under current legislation there are “limits” to what the CMA and other enforcers can do to stop illegal ticket sales online, says George Lusty, senior director for Consumer Protection at the CMA. He is calling on the government to take tougher action.
“Without reforms to the way that the uncapped secondary tickets market is regulated, problems in the sector are likely to grow as restrictions on attending live events [in the U.K.] are lifted,” the CMA says in the 60-page report.
Viagogo completed its $4 billion acquisition of fellow resale ticketing site StubHub from former owner eBay in February 2020 — one month before the coronavirus pandemic brought the global live industry to a standstill.
A badly timed deal got even worse 12 months later when the CMA ruled that the merger “will lead to a substantial reduction in competition” in the U.K. secondary ticketing business, where the two firms collectively represent over 90% of the market (split roughly 60% and 30% between Viagogo and StubHub, respectively).
To address those competition concerns, the CMA instructed Viagogo to sell StubHub’s U.K. and international ticketing business, which operates in Europe, South America, and Asia. A sale, which the CMA must approve, has yet to happen.
The threat of tougher regulations for the U.K. secondary market will be unwelcome news for Viagogo CEO Eric Baker and his investors.
Although the CMA has never publicly set a deadline for when Viagogo must sell its international StubHub business, the regulator has the power to appoint an independent trustee to handle the transaction -- therefore leaving Viagogo out of negotiations -- if a buyer cannot be found.
Another obstacle to any sale is the wildly different valuations for how much the secondary ticket market is worth in the U.K. Viagogo and StubHub say it is worth up to £2.5 billion ($3.3 billion) a year. The CMA valued it considerably lower at £350 million ($467 million) in 2019 when around 1.9 million tickets were sold across online secondary platforms in the U.K.
“We continue to work with the CMA to meet the established conditions of our merger with StubHub, including the divestment of StubHub’s international business, and hope to see resolution in the near term,” a Viagogo spokesperson tells Billboard.
Reacting to the CMA report, a spokesperson for StubHub said that any discussions around new regulations for the secondary market should “include a review of practices by primary ticket sellers that disadvantage fans such as restrictions on transferability or the way tickets are allocated for sale."
Adam Webb, campaign manager at U.K. anti-scalping group FanFair Alliance, says the proposed changes “could have far-reaching future benefits for music fans.” But he urged the CMA to investigate “substantial evidence” he has sent to the watchdog during the pandemic detailing “a range of serious and current allegations about Viagogo,” including what Webb described as “systematic breaches of consumer protection law.”
The CMA report says it explored the idea of banning the uncapped secondary ticketing industry in the U.K. but decided against it on the grounds that it would be “very difficult to enforce” and would likely lead to an increase in black market activity.