OFT refers acquisition by The GAME Group plc of Game Station Limited to the Competition Commission

119/07 9 August 2007

The OFT has today referred the completed acquisition by The GAME Group plc of Game Station Limited to the Competition Commission (CC).

The OFT has decided that the test for reference is met in relation to the supply of video gaming software in the UK.

John Fingleton, OFT Chief Executive, said:

'There is no doubt that the combined firm would face competition from Amazon, play.com and eBay, and more generalist retailers like Woolworths, HMV and Virgin. However, this merger involves the loss of competition between two parties who, in some segments at least, appear to be each other's closest competitors and in circumstances where we can not confidently rely on new companies entering the market to resolve any issues quickly. Without better evidence that competition from other suppliers will be sufficient to prevent the merged firm from raising prices or cutting back services in a way that would harm consumers - in a market where retail sales amount to around £1.5 billion - we must refer to the CC for fuller inquiry.'

The CC is expected to report by 23 January 2008.

NOTES

1. The Reference Test - the OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that a relevant merger situation has been created; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

2. Under the Enterprise Act 2002 a relevant merger situation is created if two or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.

3. The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

4. The full text of this decision will appear in the mergers section.

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