Tri­bunal probes ticket seller

Com­puticket en­joys near-mo­nop­oly po­si­tion

The Mercury - - BUSINESS REPORT - Sizwe Dlamini

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), LSquare Tech­nolo­gies (trad­ing as Tick­etS­pace) 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.

Ex­clu­sive

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.

PHOTO: MOTSHWARI MOFOKENG

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.

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