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CMA Launches Phase 2 Probe into AlphaTheta’s Acquisition of Serato

 |  May 16, 2024

Britain’s Competition and Markets Authority (CMA) has escalated its scrutiny of Japan-based AlphaTheta‘s proposed acquisition of New Zealand’s Serato. The decision, announced on Wednesday, marks the initiation of a phase 2 investigation following concerns raised during the initial probe.

The acquisition, first unveiled by AlphaTheta Corp, the parent company of Pioneer DJ, last year, stirred apprehension within regulatory circles. Valued at over $100 million, the deal involves AlphaTheta’s purchase of Auckland-based Serato Audio Research Ltd, renowned for its Serato DJ software.

According to Reuters, the CMA’s preliminary inquiry unearthed potential ramifications that could undermine competition dynamics and stifle innovation within the sector. Key concerns highlighted in the investigation include the prospective erosion of competition, diminished consumer choice and restricted access to DJ equipment and software.

Related: UK’s CMA Investigates Education Software Company for Market Abuse

Despite these apprehensions, both AlphaTheta and Serato have opted against presenting remedies to assuage the regulatory qualms. This stance has led the CMA to proceed with a more comprehensive examination of the proposed acquisition, signaling a prolonged evaluation process.

With the proliferation of digital platforms and the growing significance of software integration in DJing, ensuring a competitive landscape remains paramount to the CMA, as the decision to escalate the probe underscores.

The phase 2 investigation is anticipated to delve deeper into the potential ramifications of the acquisition, assessing its implications on market competition, innovation and consumer welfare. Stakeholders within the industry, including competitors, consumers and industry experts, are likely to be closely monitored during this intensified scrutiny.

Source: Reuters