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11/02/2020

CMA action is StubHub and Footasylum deals

Subject: Competition law/Merger control

Source: Competition and Markets Authority (CMA)

On 7 February 2020, the CMA served an initial enforcement order under section 72(2) of the Enterprise Act 2002 on Pugnacious Endeavors, Inc., PUG LLC and eBay Inc., in relation to the anticipated acquisition of the StubHub business of eBay Inc. by PUG LLC.

The order states that the CMA has reasonable grounds for suspecting that “arrangements” may be in progress or in contemplation which might ¬†result in the businesses of PUG LLC and the international StubHub businesses ceasing to be

distinct.

The CMA has also announced its provisional finding thatg JD Sports’ takeover of close competitor Footasylum could leave shoppers worse off, both in-store and online. After its initial Phase 1 review raised potential competition concerns, the CMA’s Phase 2 investigation has provisionally found that the deal substantially lessens competition nationally.

The CMA is concerned that the loss of competition from the merger could mean that shoppers see fewer discounts, for example from clearance sales and Black Friday promotions, or receive a lower quality of customer service. It could also lead to less choice in stores and online. JD Sports and Footasylum both sell sports-inspired casual clothing and footwear in stores across the UK and online through their websites. The £90 million deal was announced and completed last year.

 

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