Computicket must pay R20m competition penalty as appeal is rejected

Computicket has lost its appeal against a R20m penalty for abusing its dominance of the ticketing market.

The penalty was imposed in January by the Competition Tribunal, and the Shoprite-owned firm took its case to the Competition Appeal Court.

But on Wednesday, judge Nolwazi Boqwana upheld the tribunal’s finding and sanction.

Computicket not only attempted to exclude rivals from the ticketing market, she said, but “there is evidence pointing to actual harm on consumers”.

Boqwana also dismissed Computicket’s argument that a penalty almost equal to 10% of its turnover was excessive.

The case has its roots in 1999, when the ticketing company introduced exclusivity clauses in its contracts with inventory providers such as theatres and concert promoters.

However, the tribunal’s verdict only covered the period since its acquisition by Shoprite until 2010.

“The company’s exclusivity contracts increased dramatically following its takeover by Shoprite in 2005,” the tribunal said.

It noted a trend that Computicket’s pricing and profits increased steadily since its change of ownership.

In 2008, fledgling competitor Strictly Tickets complained about Computicket dissuading sports and entertainment venues from dealing with smaller ticket sellers.

The commission subsequently received complaints from several other companies and referred the matter to the tribunal for prosecution in April 2010.

The tribunal’s hearing began only seven years later.

In January, the tribunal said it found that “there was limited market entry during the period 2005 to 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”.

The Competition Act prohibits dominant companies from exclusionary behaviour unless they can prove that technological, efficiency or other pro-competitive reasons outweigh the anti-competitive effects. They are also banned from requiring or inducing suppliers or customers not to deal with a competitor.

“Computicket has used the exclusive contracts to weaken rivalry by raising the barriers to entry of competitors and thus increase its market power,” the tribunal said.

Boqwana agreed, saying: “Computicket significantly impeded the establishment of a viable competitive rivalry ... through its impugned conduct.”