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Overseas Inquiry Into Ticketmaster Merger

LONDON (VIP-NEWS) — The merger of Ticketmaster and concert promoter Live Nation has been referred to the UK's Competition Commission.

The referral casts some doubt on the whether the deal will succeed.

The Office of Fair Trading (OFT) is concerned about the joining of the world's largest ticketing company and the world's biggest concert promoter.

"The OFT believes that there is a realistic prospect of a substantial lessening of competition resulting from the proposed merger," it said.

The Competition Commission is due to rule on the proposed merger by 24 November.

The US Justice Department is also investigating the proposed merger.

'Few benefits'

When the deal was announced in February, the two companies said the merger would improve ticket price options, increase attendance at events and make ticket technology better.

Live Nation not only operates the majority of concert venues, but also manages many of the artists who play in them.

The company has signed artists including Jay-Z and Madonna to deals that include touring, publishing and albums, as well as huge concert promotion deals with the likes of U2 and Shakira.

Dave Newton, business development director at WeGotTickets, which sells tickets for smaller events, told the BBC the merger had few benefits for music fans.

"If you go wanted to see U2 for example, then you would have the same company which owned the rights to the artist, might well own the venue, is the promoter and is selling tickets on the primary and secondary markets as well," he said.

"There's not much room for competitive pricing in that chain, and I really can't see the upside for fans."

Competition 'risks'

The OFT's concerns are based around an agreement that Live Nation has entered into with Europe's largest ticketing agent, CTS.

The OFT noted that Live Nation had historically used Ticketmaster as its principal ticketing agent, but this agreement expires in December 2009.

Before the proposed merger was agreed, Live Nation struck the new deal with CTS, effectively replacing Ticketmaster.

However, the OFT says that now the merger has been agreed, there is a danger of competition being reduced, "because of the prospect that CTS will withdraw from the UK market".

Ali Nikpay, an OFT senior director, said: "We expected CTS's entry, through its contract with Live Nation, to be an important new competitive dynamic in the UK ticketing market.

"The proposed merger risks undermining this by potentially prompting the exit of what would likely have been a third large player from the UK, or at least significantly stunting its effectiveness.

"It creates a realistic prospect that the merger will deny those attending live music events the benefits of more competition in the distribution of tickets, which could include lower overall prices."