The Competition and Markets Authority (CMA) has granted a series of derogations (exemptions to the law) related to the acquisition of Sporting Index by Spreadex Limited.
As announced on 15 January, the CMA launched an inquiry evaluating Spreadex’s acquisition of its main rival, Sporting Index, and its impact on the UK’s spread betting market.
The inquiry will evaluate whether Sporting Index’s B2C platform will remain distinct from its new owner, Spreadex, who agreed on ‘undisclosed terms’ to acquire the heritage spread betting firm from Française des Jeux in November.
Spreadex’s acquisition must uphold the laws of the Enterprise Act of 2002, wherein it cannot subsequently diminish competition within a British marketplace to the detriment of consumers and competitors.
The CMA is charged with investigating the ‘competitive distinction’ of Sporting Index under its new ownership, evaluating its IT, management, operations, customer base, and supplier contracts/partnerships.
Spreadex had requested derogations in order to provide risk management services to Sporting Index so its business can continue to provide betting services and “manage risk in a manner that meets FCA regulatory requirements.“
An update filed on 18 January saw the CMA grant Spreadex six derogations from the Enterprise Act related to specific conditions of the acquisition.
Spreadex customer service will be allowed to access Sporting Index customer data to meet regulatory obligations, on the condition that management maintains strict control over who can access customer information and requirements for non-disclosure agreements.
Further derogations were granted to allow for Spreadex to proceed with “fair negotiation practices”, whilst maintaining Sporting Index’s ‘competitive position’. Exemptions to the Enterprise Act have been allowed to manage contract signings and information sharing processes, with a focus on preserving the Target business’s viability and competitiveness.
The CMA stated that it had granted the derogations on the general conditions of maintaining the short-term viabilities needed for Sporting Index to maintain its business and meet its regulatory obligations.
The inquiry will continue to reference the laws of the Enterprise Act, in which the CMA has launched Phase 1 of its enforcement order, taking in written responses on any competition or public interest issues related to the acquisition of Sporting Index.