Competition Tribunal investigates Computicket
Computicket enjoys near-monopoly position
THE COMPETITION Tribunal is investigating Computicket for alleged exclusive long-term contracts that the ticketing services company has concluded with inventory providers in the entertainment industry.
The probe follows a referral by the Competition Commission, which said its own investigations had established prohibited practices against the company and wanted the tribunal to order it to pay an administrative penalty equivalent to 10 percent of its turnover.
The commission also asked from the tribunal for an order declaring that all exclusivity clauses contained in the contracts concluded by Computicket with inventory providers were void and to prevent the company from entering into further exclusive contracts with the providers.
In its affidavit to the tribunal, the commission lists the involved providers as Strictly Tickets, Soundalite, KIN Entertainment News and Reviews (trading as Going Places), L-Square Technologies (trading as Ticket-Space) and Ezimidlalo Technologies.
Computicket enjoys a near-monopoly position in the market with a market share of more than 95 percent.
Its market share has been growing over the past few years.
Jerome Wilson SC for the commission said: “Computicket had a clear incumbency advantage… They had been the dominant and indeed the monopoly provider for a large part of their history…
“Scale economies matter a lot in this market, and so the more volume you have, the more efficient you can be and the more profitable you can be.”
According to Computicket, it had about 1 155 long-term contracts in place with inventory providers in the market and nearly all have a duration of three years or more.
The company said the contracts were by their very nature exclusive.
The commission said it had received complaints from other players who have a total of 10 contracts with inventory providers, none of which is exclusive.
The commission said the company was engaged in, among other things, providing outsourced ticket distribution services to inventory providers such as theatre owners, theatre producers, promoters and festival event organisers.
It said the complaints related to long-term exclusive contracts that Computicket concluded with inventory providers throughout South Africa over the past decade.
In terms of such contracts, which generally have a duration of three years or longer, Computicket is appointed as the sole provider of ticketing distribution services for all events of the relevant inventory provider for the duration of the contract.
The commission said while the wording of the various exclusive contracts disclosed to it differed, it was essentially to the effect that Computicket was appointed as the sole provider of ticket distribution services to the inventory providers.
It said it was on this basis that it determined that Computicket has, by virtue of the exclusivity clauses, foreclosed more than 90 percent of the market to competitors.
Asked to explain what exclusivity meant, Computicket general manager Kurt Drennan said: “Where we have that exclusivity provision, it means that if the client or that venue is putting on a show, they have to use us as the ticketing agent for that show.”
The commission said another significant factor in assessing the anti-competitive effects of the contracts was that the inventory providers did not have significant countervailing buyer power in their dealings with Computicket.
“Not only is the inventory provider sector of the market highly fragmented, but the alternatives available to inventory providers are limited.”
The inquiry, which started last week, will resume on Monday.
Soccer fans queue at the Computicket outlet in Johannesburg Park Station to buy tickets for a soccer match. Computicket enjoys a market share of more than 95 percent.