AlphaTheta Under Investigation by UK Government Following Serato Merger

AlphaTheta’s acquisition of Serato could cause a “substantial lessening of competition” in the DJ gear market, according to the UK’s Competition and Markets Authority.

Last July, AlphaTheta Corporation announced that it had acquired DJ software company Serato. A UK government watchdog has opened an investigation into the merger on the grounds that it could hurt competition in the DJ hardware and software markets.

AlphaTheta is the parent company of Pioneer DJ, which manufacturers industry standard CDJ players and mixers. This could lead to a scenario in which other, smaller gear manufacturers’ access suffer restricted access to Serato, whose flagship software allows DJs to scratch digital music recordings on time-coded vinyl.

This is part of the grounds for a probe opened by the Competition and Markets Authority (CMA). The government watchdog has found that “it is or may be the case that this merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”

“We’ve found this deal could substantially reduce competition in DJ software,” said CMA Senior Director for Mergers Joel Bamford. “We’re also concerned it 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.”

AlphaTheta Corporation did not immediately respond to EDM Identity’s request for comment.

Today, May 6, is the final day that AlphaTheta and Serato can respond with practical solutions to the CMA’s concerns. Otherwise, the watchdog will enter phase two of its investigation.

Alphatheta Corporation was originally called Pioneer DJ Corporation. It spun off from its parent company, Pioneer Corporation, in 2014, and rebranded to its current name in 2020. In January, Alphatheta announced a product line of its namesake that includes the Euphonia four-channel rotary mixer and Omnis-Duo DJ controller.