Competition Commision provisionally clears merger

The Competition Commission has provisionally cleared Game's acquisition of high street rival Gamestation.

The UK monopoly watchdog concluded that the merger will not substantially lessen competition in the supply of gaming software, consoles and related accessories.

The £74m merger, announced in May, brings together the largest specialist UK gaming retailers, but concerns had been raised over the impact on other video game retailers in the UK.

The Competition Commission carried out an extensive investigation into the market following a request from the Office of Fair Trading.

"This is a finely balanced verdict," said Diane Coyle, inquiry chairman at the Competition Commission.

"Our provisional conclusion is that we do not believe this acquisition will give the merged company the opportunity significantly to raise prices or reduce service for new or pre-owned products, or to cut trade-in prices paid to customers.

"If the merged company was to raise prices we think it is likely that customers could move a significant amount of their business to alternative retailers such as independents, high-street retailers, supermarkets and internet retailers."

Two members of the Competition Commission inquiry disagreed with the conclusion, creating a split 2:2 verdict. Coyle exercised her casting vote as chairman in favour of a provisional clearance.

Guidelines state that at least two-thirds of an inquiry group must decide that there is an anti-competitive possibility from a merger for the Competition Commission to consider remedies.

As a result of the split decision, the Competition Commission is requesting feedback from interested parties about the provisional findings in writing by 31 December 2007. Details are as follows:

Competition Commission
Victoria House
Southampton Row
London
WC1B 4AD

Tel: +44 (0)20 7271 0100
Email: info@cc.gsi.gov.uk

The Competition Commission is expected to publish its final report by 23 January.