Phil Elliott
15:45 (BST)
09/08/2007
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OFT refers GAME to Competition Comission
Merger with Game Station faces further scrutiny
Back in May this year European software retailer GAME announced that it was acquiring its nearest High Street competitor Gamestation for GBP 74 million (EUR 108m).
Shortly afterwards the UK's Office of Fair Trading announced that it was investigating the deal to ensure there was no negative impact on the consumer from any loss of competition in the sector.
At the time GAME commented that "As expected we have notified the acquisition of Gamestation to the OFT for normal regulatory review. This review will take about two months and we will be co-operating fully with the OFT process."
However, the OFT today announced its decision to refer the acquisition to the Competitions Commission.
John Fingleton, OFT chief executive, said of the referral, "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 GBP 1.5 billion - we must refer to the CC for fuller inquiry."
The results of the CC's investigation are expected by January 23, 2008.
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