Following GAME’s acquisition of rival UK High Street games retailer Gamestation in May, the Office of Fair Trading has announced that it is to refer the buyout to the Competitions Commission.
John Fingleton, chief executive of the OFT, stated: 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 Competition Commission for fuller inquiry.”
GAME chairman Peter Lewis has issued a response, stating: We are disappointed that the OFT found difficulty in clearing the transaction.
We firmly believe that a combination of GAME and Gamestation will not give rise to any substantial lessening of competition and intend to vigorously pursue this position before the Competition Commission.”