FTC Closes Investigation Into Zuffa Business Practices With No Action Taken

A Federal Trade Commission investigation into the business practices of UFC parent company Zuffa, LLC has been closed with no action taken by the commission, according to correspondence sent from FTC secretary Donald S. Clark to attorney Stephen Axinn, whose Washington DC firm Axinn Veltrop, and Harkrider LLP, had been retained to represent Zuffa in the investigation.

The letter was posted on the FTC's website.

In it, Clark writes that while no action is warranted at this time, the closure "is not to be construed as a determination that a violation may not have occurred" and notes that the commission reserves the right to take future action.

The investigation was initially launched last spring, shortly after Zuffa, through its subsidiary Forza, LLC, purchased Strikeforce through its parent company, Explosion Entertainment, LLC. The FTC had been determining whether the acquisition along with other business practices violated section 7 of the Clayton Act or Section 5 of the Federal Commission Act, according to the correspondence. The former deals with the creation of monopolies and the latter deals with unfair or deceptive acts or practices.From the beginning, Zuffa officials denied that their dominance of the sport constituted a monopoly.

Last March, just days after completing the Strikeforce purchase, company CEO Lorenzo Fertitta dismissed talk of antitrust issues, saying, "There's plenty of competition and there's literally no barrier to entry. Anybody who wants to get in the business, they can go file for a promoter's license, put up some capital, go sign some fighters and go get a television contract. There's plenty of options there, too. It's a wide open market for anybody who wants to get involved."

Complaints about Zuffa business tactics combined with the non-public yet widely known nature of the investigation brought intrigue to the situation, even as company officials declined direct comment through most of its duration. Ironically, Zuffa's case might have been bolstered by one of its last remaining rivals. In October 2011, Bellator was purchase by media powerhouse Viacom, which promised a heavy investment in the four-year-old promotion.

Representatives from Zuffa could not be reached for comment late on Tuesday night.