WINDHOEK - A Namibian Competition Commission (NaCC) investigation has confirmed preliminary findings that Computicket Namibia (Pty) Ltd, a ticketing services provider, abused its dominant position in the market by imposing exclusive agreements on its clients, namely event organisers as well as venue owners and operators. In addition, the NaCC found that Computicket engaged in price discrimination, tying and bundling.
Price discrimination in competition law generally refers to the practice of selling a product or service at different prices to different customers even though the cost of producing or selling the product is the same. Tying and bundling arises when two products or services are offered jointly with no option to procure the products or services separately, despite the products being distinct and separate in their nature.
In a statement issued yesterday by the NaCC’s Enforcement, Exemptions and Cartels (EEC) Division, the Commission noted that its investigation revealed that Computicket concluded agreements where it is appointed as the sole provider of the ticketing services for the duration of its agreements with clients (3 to 5 years).
“This means that Computicket’s clients are therefore prohibited from using any other service provider for the duration of the agreement with Computicket. Conversely, Computicket’s competitors are prevented from being able to offer their services to these clients… Further abusive conditions include obligations on clients to ensure that third parties use Computicket’s services if they wish to host events in association with Computicket clients or at venues owned or operated by Computicket clients,” read the NaCC’s statement.
The NaCC continued that Computicket’s clients are further, as a consequence of these exclusive agreements, required to promote the availability of tickets through Computicket’s sales and distribution channels, namely retail outlets, call centres, internet, mobile applications and appointed agents. Section 26 of the Competition Act strictly prohibits the abuse of a dominant position by undertakings and the NaCC’s preliminary findings indicate that Computicket has contravened the law, specifically Section 26(2)(b) of the Competition Act which prohibits an abuse of dominance which entails limiting or restricting production, market outlets, market access, investment, technical development or technological progress. Section 26(2)(c) of the Competition Act also prohibits an abuse of dominance by means of applying dissimilar conditions to equivalent transactions with other trading parties; while Section 26(2)(d) of the Act prohibits an abuse of dominance by means of making the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject matter of the contracts.
“Exclusive agreements by a dominant undertaking such as Computicket provide an unfair competitive advantage and dis-incentivise the dominant undertaking from being innovative. On the other hand, tying and bundling serves as a method through which exclusive dealing is enforced, by making the procuring of the main product or service (i.e. ticketing services) contingent on the procuring of a secondary product or service (i.e. requiring a client to promote the availability of tickets through Computicket’s sales and distribution channels etc.). Furthermore, price discrimination is a concern to competition law since such conduct by a dominant ticketing provider such as Computicket can be employed in order to lock in clients in a manner that makes such clients inaccessible to Computicket’s competitors, thereby limiting market access,” read the statement.
The NaCC’s findings added that Computicket’s conduct restricts clients or consumers’ choice of ticketing service providers and prevents other ticketing providers from effectively competing in the market.
“Clients are furthermore restricted from alternating between ticketing providers in search for better or cheaper service offerings… The Commission however wishes to reiterate that its findings are preliminary and that no final decision has been made. The identified affected undertakings, including Computicket and its competitors have been duly notified of the Commission’s preliminary findings and may call for an oral conference to make representations to the Commission on its preliminary investigation findings before a final determination can be made regarding whether or not the Commission will refer the matter to the High Court for remedial action as prescribed in the Competition Act,” the statement concluded.
The NACC has also called on anyone affected by Computicket’s conduct or the Commission’s preliminary decision to make submissions or representations to the Commission by September 30, 2019.