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Computicket loses appeal against $1.5m fine

South Africa’s Competition Appeal Court has dismissed with costs an appeal by Computicket, the country’s biggest ticket seller, against a 20 million rand (US$1.5m) fine for alleged abuse of its market dominance.

According to Fin24, appeal court judge Nolwazi Boqwana ruled today (23 October) that the penalty should stand, upholding the findings of a nine-year Competition Tribunal investigation into the company, owned by local supermarket chain Shoprite.

The tribunal found in January that Computicket had misused long-term exclusive contracts with promoters to “exclude new entrants from the outsourced ticket distribution market”, substantially lessening competition in the $83m South African live music market.

Boqwana’s judgment highlights that the Competition Tribunal found Computicket either enforced or threatened to enforce the exclusivity clause of its contracts strictly, and refused to enter into non-exclusive agreements with promoters.

“I find no basis to interfere with the tribunal’s discretion”

“In summary, I am persuaded that not only was the exclusionary act substantial in terms of foreclosing on market rivals, there is evidence pointing to actual harm on consumers,” the judgment reads.

The court also ruled that the R20m fine is considered fair under South African law, noting that the tribunal is able to penalise Computicket up to 10% of its annual turnover.

“Having considered the submissions made on appeal, in relation to penalty, I find no basis to interfere with the tribunal’s discretion,” the judgment concludes.

According to the International Ticketing Yearbook 2019, Computicket remains South Africa’s largest ticket agency, with a “powerful network of online and physical outlets”, having launched in 1971 as the world’s first computerised ticketing system.

 


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Computicket fined R20m for abuse of market power

After a nearly decade-long investigation, South Africa’s leading ticket agency, Computicket, has been fined 20 million rand (US$1.5m), for allegedly abusing its dominant market position to keep competitors out of the market.

In a 61-page decision handed down by the South African Competition Tribunal this morning (21 January), Computicket – owned by local supermarket giant Shoprite – is found to have misused long-term (three-plus-year) exclusive contracts with promoters to “exclude new entrants from the outsourced ticket distribution market”, substantially lessening competition in the $83bn South African live music market.

The Competition Tribunal’s judgment brings to an end an investigation launched in 2010 by the Competition Commission of South Africa, which sought to uncover alleged abuses in the period following Computicket’s 2005 takeover by Shoprite. The origins of the case date to February 2008 when a rival company, Strictly Tickets, filed a complaint alleging anti-competitive behaviour.

“The company’s exclusivity contracts increased dramatically (in terms of quantity and duration) following its takeover by Shoprite in 2005,” according to the Competition Commission. “In addition, from at least December 2006 to September 2009, Computicket’s personnel aggressively enforced the exclusive agreements among its clients including theatres, music promoters and event organisers. This happened particularly when new entrants emerged in the market.”

In its judgment, the Competition Tribunal notes that Computicket “enjoyed a near monopoly position at the time it introduced the three-year version of the exclusive contracts in 2005″, after which “there was limited market entry during the period 2005 and 2010, a period which […] coincided with […] the introduction of the longer-term exclusivity contracts and Computicket’s aggressive enforcement of its rights under these contracts.”

“From at least December 2006 to September 2009, Computicket’s personnel aggressively enforced the exclusive agreements among its clients”

“No other theory for why entry [of new companies into the market] was so limited and ineffectual has been offered to rebut this conclusion,” it adds.

In December 2017, Germany’s largest ticket seller, CTS Eventim, was similarly found to be abusing its market dominance by requiring partner promoters to sell tickets only via its own eventim.net platform.

South Africa’s Competition Act 1998 prohibits dominant companies from engaging in “exclusionary acts” unless they can show “technological, efficiency or other pro-competitive gains which outweigh the anti-competitive effect of its act”, such as requiring their suppliers or customers not to deal with competitors.

In a statement, Shoprite says it plans to appeal the ruling. “Computicket (Pty) Ltd will appeal the Competition Tribunal’s finding that it utilised its dominance between 2005–2010 relating to exclusive agreements with inventory providers for live entertainment events,” it reads.

“The ticketing provider has studied the tribunal’s decision and, [under the] Competition Act, it has 15 business days to file its notice of appeal against the tribunal’s decision, which it intends to do.”

According to the International Ticketing Yearbook 2018, Computicket, “with a strong mass-market position and a powerful network of online and physical outlets”, “still holds pole position” in the South African market, having launched in 1971 as the world’s first computerised ticketing system.

 


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SA’s Computicket buys self-service platform

South African ticketing market leader Computicket has acquired Entry Ninja, a Pretoria-based event-registration platform for sporting events.

The buy, the terms of which were not disclosed, is the first acquisition by Computicket since its bid to have a Competition Tribunal investigation into alleged exclusionary and anti-competitive practices was dismissed in October. The company is the subject of a long-running probe, initiated in 2010, as a result of complaints by several smaller rivals, including Strictly Tickets, Artslink, Going Places, TicketSpace and Ezimidlalo Technologies.

According to the International Ticketing Yearbook 2016, promoter clients of Computicket include Big Concerts and Hilltop Live, the former now Live Nation’s local operation.

The acquisition of Entry Ninja will, says Joseph Bronn, deputy COO of Computicket parent Shoprite, allow the company to “service mass sporting events via Entry Ninja’s innovative system”.

“We were actively looking to extend into event registration so as to better service our customers through the approximately 1,000 Computicket outlets,” comments Bonn.

 


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