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The Competition Tribunal has found that Computicket (Pty) Ltd abused its dominance between 2005-2010 and has ordered the local ticketing giant to pay an administrative penalty of R20 000 000.00 (twenty million rand).
 
The Tribunal’s decision follows protracted litigation in the matter and an earlier investigation by the Commission into the company’s use of long-term exclusive agreements to exclude new entrants from the outsourced ticket distribution market.
 
The Commission led evidence that Computicket required or induced its customers not to deal with competitors. The company’s exclusivity contracts increased dramatically (in terms of quantity and duration) following its takeover by Shoprite in 2005. In addition, from at least December 2006-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.
 
Computicket denied that its contracts had an exclusionary effect. Instead, it argued that customers preferred to use its services and that exclusive contracts were also a means to mitigate against reputational risk. Further, Computicket argued that there were a number of players which entered in the relevant period and which competed with it for inventory.
 
In its judgment, the Tribunal notes that Computicket “enjoyed a near monopoly position at the time it introduced the three-year version of the exclusive contracts in 2005”.
 
The Tribunal has found that “there was limited market entry during the period 2005 and 2010, a period which at the beginning and thereafter coincided with the period of the introduction of the longer-term exclusivity contracts and Computicket’s aggressive enforcement of its rights under these contracts. No other theory for why entry was so limited and ineffectual has been offered to rebut this conclusion …”.
 
The Tribunal has also found “on the basis of evidence, that exclusionary effects are evident with sufficient robustness for the period 2005 to 2010”. The Tribunal noted a trend that Computicket’s pricing and profits increased steadily during this period.  
 
Background
 
The origins of the case date back to February 2008 when a rival of Computicket, known as Strictly Tickets CC, laid a complaint with the Commission. This was followed by further complaints by other competitors of Computicket, namely: Soundalite CC, KZN Entertainment New and Reviews CC, L Square Technologies and Ezimidlalo Technologies CC. The complaints were lodged separately between March 2008 and September 2009.
 
The Commission consolidated the complaints and referred the matter to the Tribunal for prosecution in April 2010. The hearing in this matter started more than seven years later, in October 2017. The long delay is attributed to a lengthy and litigious history between the parties over discovery of documents, followed by an unsuccessful administrative law challenge to the Commissioner’s decision to refer the complaint.
 
The full judgment can be accessed on the Tribunal’s website at: https://www.comptrib.co.za/assets/Uploads/CR008Apr10.pdf

Issued by The Competition Tribunal