Second hand market scrutinised in Gamestation acquisition

The Competition Commission has published an initial statement of issues with GAME's acquisition of rival retailer Gamestation.

Although the Competition Commission has yet to reach any conclusions, the statement reveals that the market for second hand or 'pre-owned' games on the High Street is just one of many areas that will come under scrutiny.

Apart from independently owned High Street stores, GAME and Gamestation are the two main retailers in the UK that offer the buying and selling of second hand games and hardware.

With no competition from the likes of entertainment retailers or supermarkets, the only other choice for customers wishing to trade in software or sell it on is via online services or more informal routes such as car boot sales.

The Competition Commission will ask "whether, for pre-owned products, there are particular barriers to switching to other retailers, especially internet-based retailers or auction websites because customers perceive a higher risk of products being damaged or faulty, incompatible, or pirated, and/or returning such products would be more difficult in the case of a remote supplier."

Whether consumers perceive selling over the internet as difficult and whether there are greater risks and lower returns will also be addressed in the investigation.

It's not only the second hand market that will be examined by the Competition Commission, as it looks towards issues more common with any business merger, such as a reduction in the range of goods for sale, an increase in prices, a drop in service quality and whether a merged company would be able to negotiate exclusive deals from suppliers.

The full statement from the Competition Commission in available on its website, with comments invited before September 28.