UK Competition Appeal Tribunal quashes clearance of Ticketmaster/Live Nation merger

On 11 February 2010, the UK Competition Appeal Tribunal (“CAT”) quashed the unconditional clearance of the merger between ticketing agency Ticketmaster and music promoter Live Nation granted by the Competition Commission (“CC”).

In its report published on 22 December 2009, the CC cleared the merger, concluding it would 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 (see Newsletter 5/2009 p. 11 for details).

The CAT’s order refers the matter back to the CC to reconsider the questions raised by the Office of Fair Trading and make a new decision, amid claims that the CC denied rival ticketing agent CTS Eventim (“CTS”) its right to a fair hearing and in particular deprived it of the chance to comment on the CC’s adverse provisional findings on the merger.

The CC accepted that CTS’s claim was “arguable”, at least in the particular circumstances of the case. In fact, as the CAT’s orders points out, CTS was not only an interested third party to the investigation: CTS’s strategy and entry into the UK market formed a key part of the CC’s assessment of the effects of the merger.  The CC has thus recognized that the matters upon which CTS seeks to comment could affect the findings contained in its report and in particular the conclusion that the merger was not anti-competitive.

In fact, in its provisional findings report, the CC was of the view that as a result of the merger, the merged entity would have both the ability and the incentive to impede CTS’s position in the UK market for primary retailing of live music tickets in several ways, notably by restricting the number of tickets CTS could offer and its range of events. According to the CC, this would have the direct and significant effect on CTS’s ability to attract consumers and consequently, on its ability to gain ticket allocations from other promoters and venues. The CC recognized that this “chicken-and-egg” problem means that becoming a large supplier is very difficult without a preferred agreement with one of the large source of tickets (e.g. like the agreement between Live Nation and CTS, under which, in the UK, CTS would supply Live Nation with a managed ticketing service, enabling Live Nation’s ticket to be sold by CTS or any other ticket agent).

The CC has now three months from the date of the CAT’s order to make a new decision, giving it a deadline of 11 May 2010.  The merger of Ticketmaster and Live Nation was approved by the U.S. Department of Justice (subject to conditions) on 25 January 2010 (see above p. 3), and the parties have completed the merger. Accordingly, this means that the CC will be concerned with a completed merger, rather than an (so called) anticipated merger. [Gabriele Accardo]