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Competition Commission wants Shoprite, Computicket fined over 'anti-competitive conduct'

The Competition Commission announced on Thursday that it had referred Computicket and its holding company, Shoprite Checkers, to the Competition Tribunal for prosecution on alleged anti-competitive conduct.

The Commission has asked the Tribunal to impose an administrative penalty of 10% of Computicket and Shoprite Checkers's annual turnover. Shoprite Checkers and Computicket told Fin24 they intended to oppose the matter.

Between 2008 and 2009, the Commission received five complaints from Strictly Tickets, Artslink, Going Places, TicketSpace and Ezimidlalo Technologies against Computicket.

The Commission consolidated these complaints into a single case, as all the complaints raised similar allegations against Computicket.

Exclusive agreements

The complainants alleged that Computicket engaged in anti-competitive practices by concluding exclusive agreements with inventory providers for the provision of outsourced ticket distribution services for the entertainment industry, which covers events such as sports, cinemas, theatres, festivals and live events.

In terms of the relevant agreements, Computicket was appointed as the sole provider of ticketing services to the inventory provider or customer in question.

In these agreements, Computicket had the ability to "price discriminate" between its large and small inventory provider customers, according to the Commission.

"The contractual terms of the agreements extend the foreclosure in that third parties, who are not necessarily contracted with Computicket, are required to deal with Computicket, to the exclusion of Computicket's competitors, in the event that such third parties contract with Computicket's customer," states the Commission.

"Computicket's larger customers are able to negotiate better rates from Computicket than smaller customers, based on their size. This allows Computicket to isolate the competitive pressure arising from those inventory providers who may find the option of self-supply more attractive."

Lengthy litigation

According to the Commission, the matter was subject to lengthy litigation around certain legal technicalities, and the Tribunal heard arguments on the merits of the case in October 2017. The Tribunal's decision on the matter is still pending.

While the initial matter was going through the litigation processes, the Commission received a similar complaint in June 2013 from Twangoo, trading as Groupon.

Groupon subsequently withdrew its complaint. The Commission then initiated another complaint against Computicket in November 2014. Shoprite Checkers, as Computicket's holding company, was added as second respondent in October 2018.

Shoprite Checkers told Fin24 on Thursday afternoon that it and Computicket were served with the Notice of Referral of the complaint by the Competition Commission to the Competition Tribunal on December 18, 2018.

The companies have studied the Referral and disagree with the basis thereof.

"In terms of the Competition Act, the respondent companies may answer the Referral within 20 business days after being served with the Referral. Opposing affidavits will be filed by the respondent companies within the required time frames," commented Shoprite Checkers.

By late afternoon on Thursday the share price of Shoprite Checkers was down 2.92% at R180.99 per share.

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