CC Gives Initial GAME/GameStation Acquisition Findings
'Theories of Harm' and possible lessening of competition identified
The Competition Commission (CC) has laid out some potential problem areas in GAME's acquisition of GameStation.
Outlined in a statement on the CC's website are four 'Theories of Harm' and six potential ways in which the acquisition could damage competitiveness in the video games retail market.
The 'Theories of Harm' outline the following potential problems:
The Competition Commission was handed the task of investigating the acquisition back in August.
Additionally, the CC outlines six ways in which the acquisition may generate a substantial lessening of competition (SLC):
In a nutshell, then, the Competition Commission has said that it is, in fact, concerned that GAME may become too fat and powerful. At this stage the CC is careful to point out, “The issues statement should not be seen as implying that the Group has identified any competition concerns—the CC has yet to reach any conclusions on this inquiry.”
Should it find these concerns to be valid, it will consider “what remedies might be appropriate, taking into account any customer benefits that might arise from the acquisition, and will issue any remedies statement, should this be required, at about the time it publishes its provisional findings.”
The CC has 24 weeks in total to publish its report, giving it until January 28th. Anyone wishing to add to the list of issues has until September 28th to do so.
It has been speculated that should the CC find the acquisition have created an SLC or created harm, US retail giant GameStop may move into the UK market and acquire GameStation.
Outlined in a statement on the CC's website are four 'Theories of Harm' and six potential ways in which the acquisition could damage competitiveness in the video games retail market.
The 'Theories of Harm' outline the following potential problems:
"(a) an increase in the market power of the merged entity in the supply of pre-owned gaming software and hardware;
(b) an increase in the market power of the merged entity for the trade-in of gaming software and hardware;
(c) an increase in the market power of the merged entity in the purchase of gaming software and hardware such as to harm suppliers and their incentives to innovate, and/or to induce suppliers to discriminate unfairly in the allocation of products to the merged entity; and
(d) an increase in the market power of the merged entity in the supply of mint gaming software and hardware."
(b) an increase in the market power of the merged entity for the trade-in of gaming software and hardware;
(c) an increase in the market power of the merged entity in the purchase of gaming software and hardware such as to harm suppliers and their incentives to innovate, and/or to induce suppliers to discriminate unfairly in the allocation of products to the merged entity; and
(d) an increase in the market power of the merged entity in the supply of mint gaming software and hardware."
The Competition Commission was handed the task of investigating the acquisition back in August.
Additionally, the CC outlines six ways in which the acquisition may generate a substantial lessening of competition (SLC):
"(a) an increase in the price of gaming software and hardware; and/or
(b) a reduction in promotions for gaming software and hardware; and/or
(c) a reduction in the range of gaming software and hardware offered; and/or
(d) a reduction in the quality of service offered by these retailers to customers; and/or
(e) a reduction in the trade-in values offered for gaming software and hardware; and/or
(f) a reduction in innovation by these retailers and suppliers."
(b) a reduction in promotions for gaming software and hardware; and/or
(c) a reduction in the range of gaming software and hardware offered; and/or
(d) a reduction in the quality of service offered by these retailers to customers; and/or
(e) a reduction in the trade-in values offered for gaming software and hardware; and/or
(f) a reduction in innovation by these retailers and suppliers."
In a nutshell, then, the Competition Commission has said that it is, in fact, concerned that GAME may become too fat and powerful. At this stage the CC is careful to point out, “The issues statement should not be seen as implying that the Group has identified any competition concerns—the CC has yet to reach any conclusions on this inquiry.”
Should it find these concerns to be valid, it will consider “what remedies might be appropriate, taking into account any customer benefits that might arise from the acquisition, and will issue any remedies statement, should this be required, at about the time it publishes its provisional findings.”
The CC has 24 weeks in total to publish its report, giving it until January 28th. Anyone wishing to add to the list of issues has until September 28th to do so.
It has been speculated that should the CC find the acquisition have created an SLC or created harm, US retail giant GameStop may move into the UK market and acquire GameStation.
Companies:
Gamestation
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Comments
Joji 18 Sep 2007 20:51
1/1
Gamestop? Now that would be cool.