December 22, 2009

By By Andre Paine, London

In its ruling today (Dec. 22), the Competition Commission (CC) completely changed its position on the proposed merger of Live Nation and Ticketmaster in the U.K.

Such an about-turn for the U.K. regulator is "unusual" according to Simon Barnes, Counsel for competition law at the London-based law firm Lovells.

"The Competition Commission has cleared [the proposed merger] despite having indicated in October that the transaction would give rise to competition concerns in the U.K.," he says. The CC itself admitted the decision was "unusual but not unique."

The preliminary report based its decision not to back the merger in the U.K. on concerns about the entry into the market of German company CTS Eventim, which signed a ticketing deal with Live Nation prior to the merger plan.

However, following submissions by Ticketmaster and Live Nation - including claims from the promoter that the preliminary ruling had "legal flaws" - the CC decided that the deal with Eventim would be binding even if the merger went ahead. It also concluded that any attempt by the merged entity to restrict tickets to other ticket agents, or refusing to sell tickets for other promoters, would likely harm its overall performance.

"It is unusual for the CC to change its mind between its preliminary report and its final findings," says Barnes. "But that is precisely what it has done in this case. Indeed, the CC has now been persuaded that the merger will not make any significant difference to whether CTS Eventim can successfully penetrate the U.K. market."

While Live Nation and Ticketmaster have welcomed the about-turn from the CC, they still have to get approval from the U.S. Department of Justice (DOJ) as well as authorities in Canada. It has been approved in Norway and Turkey.

"The merger is a U.S.-led transaction but has implications in many geographic markets around the world," says Barnes. He adds that the competition analysis in Canada and the U.S. "will be dictated by local market conditions, so will be unaffected by today's ruling in the U.K."

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