SHOPRITE Checkers, holding company of Computicket, has announced that the firm will defend itself against allegations of uncompetitive behaviour.
This after the Competition Commission referred the company to the Consumer Tribunal, asking for it to be fined 10% of its annual turnover.
Last week the Competition Commission said that it had referred a case against ticket distributors Computicket (Pty) Ltd and Shoprite Checkers (Pty) Ltd to the Competition Tribunal for prosecution for alleged anticompetitive conduct.
“The two companies have been charged with signing and enforcing exclusive agreements in contravention of the Competition Act from 2013 to date,” the commission said.
In terms of the agreements, the commission said, Computicket had been appointed as the sole provider of ticketing services to the inventory provider or customer. After Shoprite Checkers acquired Computicket, the firm changed the duration of its exclusive contracts in 2015 to a standard period of three years.
“In these agreements, Computicket has the ability to price discriminate between its large and small inventory provider customers. 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,” the commission said.
“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.”
The commission has asked the Tribunal to impose an administrative penalty of 10% of Computicket and Shoprite Checkers’ annual turnover.
Shoprite Checkers said in a statement that the firms had been served with a notice of referral of the complaint by the commission to the Competition Tribunal on December 18.
“The companies have studied the referral and disagree with the basis for the referral,” Shoprite said.
Shoprite said the firms had 20 business days in which to respond to the referral. “Opposing affidavits will be filed by the respondent companies,” the company said.
The commission said it had earlier also received complaints from Strictly Tickets, Artslink, Going Places, Ticket- Space and Ezimidlalo Technologies against Computicket between 2008 and 2009.
“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,” the commission said.
The commission said it had consolidated the complaints into a single case and referred the matter to the tribunal in April 2010 on the basis that “the exclusive agreements between Computicket and inventory providers contravene section 8(d)(i), alternatively section 8(c) and/or section 5(1) of the Competition Act No 89 of 1998, as amended”.
The case covered the period from 1999 to December 2012.
“The matter was subject to lengthy litigation around certain legal technicalities about whether Computicket was entitled to certain documents in the commission’s possession,” the commission said.
The technical dispute was eventually settled in favour of Computicket and the tribunal heard the matter in October 2017 but its ruling is still pending.
“While the initial matter was going through the litigation processes, the commission received a complaint from Twangoo (Pty) Ltd trading as Groupon South Africa (‘Groupon’) on June 18 2013 which alleged that Computicket concluded exclusive agreements with inventory providers in the entertainment industry in contravention of the Competition Act,” the commission said.
Groupon withdrew its complaint in September 2014 but the commission initiated a complaint against Computicket in November 2014 for the alleged contravention of section 8(d)(i), 8(c) and 5(1) of the act. Shoprite was added as a second respondent to the matter in October 2018.