Competition Commission reveals initial findings on Gamestation deal

A new ‘statement of issues’ on the Competition Commission’s website reveals four ‘theories of harm’ and six ways in which the recent acquisition could create a substantial lessening of competition.

The four hypothetical ‘theories of harm’ are stated as:

(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

(d) An increase in the market power of the merged entity in the supply of mint gaming software and hardware.

The document goes on to identify six ways in which the buy-out might result in a substantial lessening of competition, including:

(a) An increase in the price of gaming software and hardware

(b) A reduction in promotions for gaming software and hardware

(c) A reduction in the range of gaming software and hardware offered

(d) A reduction in the quality of service offered by these retailers to customers

(e) A reduction in the trade-in values offered for gaming software and hardware

(f) A reduction in innovation by these retailers and suppliers

Thanks to gamesindustry.biz for the heads up