UK competition watchdog flags concerns over AlphaTheta-Serato DJ tech deal

(Reuters) - British competition regulator said on Wednesday that Japan-based AlphaTheta's proposed deal to acquire New Zealand's Serato could see DJs paying more to keep partygoers entertained.

WHY IT'S IMPORTANT

Britain's Competition and Markets Authority (CMA), after its phase 1 probe launched in March, found that the deal could reduce innovation, choice, and access to DJ equipment and software.

The investigation also found that the deal could weaken competition in various DJ hardware markets by restricting or worsening other hardware manufacturers' access to Serato's software

CONTEXT

AlphaTheta Corp, the company behind the Pioneer DJ brand, said last year it would buy the Auckland-based Serato Audio Research Ltd, a firm known for its Serato DJ software, in a deal valued at more than $100 million.

New Zealand Commerce Commission is also probing the deal.

KEY QUOTE

"We are also concerned it (deal) could negatively impact the hardware markets by allowing the combined business to leverage Serato's leading software to harm its hardware competitors, ultimately affecting DJs and consumers," said Joel Bamford, executive director for mergers at the CMA.

WHAT'S NEXT

Both AlphaTheta and Serato have five working days to respond with meaningful solutions to the CMA, otherwise the deal will be referred to an in-depth phase 2 investigation.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Eileen Soreng)