Expressing its concerns
The UK’s Competition and Markets Authority (CMA) has begun investigating Sporting Index’s recent acquisition of Spreadex. The CMA revealed on Tuesday that it issued an initial enforcement order to allow it time to determine if the merger “has resulted or may be expected to result in a substantial lessening of competition.” It does not have a deadline for the launch of the merger inquiry or for when it will deliver its decision.
Fran?aise des Jeux (FDJ) sold spread betting platform Spreadex for an undisclosed sum
French national lottery operator Fran?aise des Jeux (FDJ) sold Spreadex for an undisclosed sum in November. The CMA’s order outlines various conditions that Spreadex management has to stick to until the body comes to a final conclusion. This includes the management not carrying out any actions that could lead to the two companies integrating unless it receives the CMA’s written consent.
Strict conditions
The regulator also wants both platforms to continue running independently of one another, rather folding one into the other. They cannot combine supplier or customer lists, share business secrets, integrate any IT, or change or transfer any key staff members.
can face a fine and up to two years in prison
Failure to comply with the order will result in a penalty equivalent to 5% of the total global turnover of the offending company. Anyone who knowingly or recklessly supplies false or misleading information to the CMA can face a fine and up to two years in prison.
Market dominance
Spreadex and Sporting Index have been the two leading spread betting platforms in the UK market for quite some time. The latter started its operations in 1992 and has dominated the market. The CMA has reasonable grounds to suspect that the merger of the two operations is anti-competition.
Talking to the Racing Post, a spokesperson for Spreadex confirmed that the company is “assisting the CMA with their review.”