Dusseldorf court confirms ban on CTS’s Four Artists acquisition
A Dusseldorf court has rejected an appeal by CTS Eventim that sought to overturn the block on its acquisition of German promoter Four Artists.
Eventim, Europe’s largest ticket agency, announced in March 2017 it planned to acquire Four Artists, a Berlin-based promoter and booking agency which organises more than 2,000 shows annually, as well as a number of festivals, to bolster its events division.
The acquisition was unexpectedly torpedoed that November by Germany’s competition watchdog, the Federal Cartel Office (Bundeskartellamt), which ruled that the merger would substantially lessen competition by strengthening CTS Eventim’s already dominant market position.
A CTS Eventim spokesperson confirmed to IQ at the time it would appeal the decision, and later did so, seeking legal redress in the German court system.
However, in in a decision handed down late last week, the Higher Regional Court of Dusseldorf (Oberlandesgericht Düsseldorf) dismissed the company’s appeal, siding with the Cartel Office. A spokesperson tells MusikWoche Eventim will consider the court’s verdict before deciding whether to reappeal.
CTS Eventim lost its appeal against a ban on charging fees on print-at-home tickets in another OLG, in Bremen, in August.
CTS exclusive ban confirmed…as market cap tops €4bn
Germany’s Federal Cartel Office has published details of its controversial ruling banning CTS Eventim’s exclusivity agreements with promoters and box offices, mandating that at least 20% of ticket inventory from the company’s partners be available to other ticket sellers.
The decision, which can be read (in German) on the Bundeskartellamt website, gives formerly Eventim-exclusive promoters the option of allocating at least 20% of their annual ticket inventory to other ticket agencies, providing the term of their agreement is more than two years (or indefinite).
CTS Eventim is therefore required to either adjust or terminate all existing agreements, although the German ticketing giant – Europe’s largest – says it still plans to appeal the ruling.
“The decision of the Federal Cartel Office ignores the fierce competition in the market for ticket services”
“The decision of the Federal Cartel Office ignores the fierce competition in the market for ticket services, which is constantly increasing as a result of frequent entries into the market by digital [ticketing companies] from Germany and abroad,” says a spokesperson.
While it remains to be seen whether the Bundeskartellamt decision, along with a previous edict prohibiting the company’s takeover of promoter Four Artists, will hurt CTS’s ticketing business, the attention from regulatory authorities has failed to dent its share price: Friday saw the company’s market cap top the €4 billion mark for the first time since its floatation in 2000.
According to financial newswire dpa-AFX, 80% of analysts recommend buying CTS stock, with the remaining 20% suggesting holding.
Eventim: “We will not accept” anti-exclusive contract ruling
CTS Eventim is to take to the courts in a bid to overturn a surprise ban, announced today, on its use of exclusivity agreements with promoters and box offices in Germany.
The new ruling, by the Federal Cartel Office (Bundeskartellamt), prohibits the Munich-based ticketing giant – which, with a 50–70% marketshare, is by far the German market leader, according to the International Ticketing Yearbook 2017 – of requiring partners to “only sell tickets exclusively or to a considerable extent via CTS’s eventim.net ticket sales system” – something it claims is an abuse of the company’s dominant market position.
According to the Bundeskartellamt, these “abusive exclusivity contracts with event organisers and advance booking offices” are shutting out competing ticketers and “encouraging a general trends towards further monopolisation” in Germany. Under today’s judgment, Eventim partners must have the option of selling at least 20% of their inventory annually via other ticket agencies, if their deal with the company is longer than two years. CTS has been given four months to comply with the ruling.
Andreas Mundt, president of the Bundeskartellamt, says: “As the operator of the largest ticketing system in Germany, CTS Eventim holds a dominant position in the market. Under competition law, a company with such a market position has special obligations.
“Where CTS Eventim commits its contract partners to sell tickets exclusively via its own ticketing system, the company is abusing its market power to the detriment of competition. With our decision, substantial ticket quotas will be freed up for sale via competing ticketing systems.”
The case has echoes of Songkick’s legal complaint against Live Nation/Tickmaster, which similarly alleges the US market leader is abusing its “monopoly power”, including exclusivity arrangements with major venues, to stifle competition in that market.
“We regret that the agency has not adequately considered our strong counter-arguments”
In a statement issued today, CTS Eventim says it will seek legal redress, and accuses the Bundeskartellamt of making a biased decision that fails to take into account the changing face of ticketing in Germany.
“The decision of the Federal Cartel Office ignores the fierce competition in the market for ticket services, which is constantly increasing as a result of frequent market entries by digital providers from Germany and abroad,” it reads.
“Against this background, we have to assume that the Cartel Office has gone into this procedure with a preconceived notion that does not adequately reflect this development. All the investigations in the three-year proceedings were apparently aimed at confirming this belief.
“We regret that the agency has not adequately considered our strong counter-arguments, especially as they are supported by current studies and economic expert reports. [If] they had, the investigation would have led to a different outcome.”
“For these reasons,” the statement concludes, “we will not accept the decision of the Federal Cartel Office and [will] engage the courts to correct it.”
The Bundeskartellamt last month blocked CTS Eventim’s acquisition of promoter/agency Four Artists, also on competition grounds.
Eventim under investigation as Four Artists buy blocked
A spokesperson for CTS Eventim has told IQ the company is likely to appeal after Germany’s competition regulator blocked its takeover of Four Artists.
Ticketing giant CTS announced in March it was to acquire Four Artists, a Berlin-based promoter and booking agency, to bolster its events division, especially “with regard to German artists and younger target groups”. Four Artists’ roster of close to 300 artists includes Seeed, The Lumineers, Scooter, Joris, Charles Bradley, Jimmy Eat World, Marteria, Rea Garvey and company co-founders Die Fantastischen Vier, while it also promotes more than 2,000 shows annually, including a number of festivals
The Federal Cartel Office (Bundeskartellamt) said on Friday the planned merger would substantially lessen competition by strengthening CTS Eventim’s already dominant market position – and also revealed the competition regulator is investigating whether CTS Eventim is “abusing” that position “by concluding exclusive contracts with event organisers and advance booking offices”, in a complaint reminiscent of Songkick’s accusations against Live Nation.
“We believe the takeover of Four Artists is eligible for approval and reserve the right to seek legal remedies against the ruling”
Bundeskartellamt president Andreas Mundt (pictured) says: “As the operator of the largest ticketing system in Germany, CTS Eventim holds a dominant position in the market. Concert and tour organisers, as well as advance booking offices, are dependent on it. The company also has a very powerful market position in the sale of tickets via its own online shop and has already integrated several event organisers into its company’s structure in the past.
“By acquiring Four Artists, CTS Eventim would gain control of additional relevant ticket quotas and expand its market position further.”
Responding, a CTS spokesperson comments: “We have taken note of the decision by the Cartel Office and are currently examining the grounds for said decision. We believe that the takeover of Four Artists is eligible for approval and therefore reserve the right to seek legal remedies against the ruling.”