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Settlement whereby Computicket agrees to pay R11.3m administrative penalty confirmed as an order by the Competition Tribunal
The Competition Tribunal (“the Tribunal”) has confirmed, as an order, a settlement agreement between the Competition Commission (“the Commission”), Computicket (Pty) Ltd (“Computicket”) and Shoprite Checkers (Pty) Ltd (“Shoprite”), bringing to an end the protracted litigation between the parties relating to alleged abuse of dominance for their exclusive arrangements with inventory providers regarding outsourced ticket distribution services (“OTS”) in the entertainment industry.
This effectively means that Computicket and Shoprite will no longer be prosecuted by the Commission for alleged abuse of dominance, as the settlement agreement constitutes full and final settlement of all proceedings between the firms and the Commission regarding this complaint. In addition, the Tribunal’s order renders the settlement agreement legally binding.
The settlement agreement
In terms of the settlement agreement, Computicket agrees to pay an administrative penalty totalling R11 317 000. The Commission, in turn, will pay the amount to the National Revenue Fund, in accordance with the Competition Act (“the Act”).
Furthermore, Computicket agrees and undertakes to develop and implement a competition law compliance programme designed to ensure that its employees, management and directors to not contravene the Act.
No admissions
Although the firms agreed to enter into the settlement agreement with the Commission, neither admit that they constitute a single economic entity as alleged by the Commission in its complaint referral; nor do they admit that they had contravened the Act as alleged by the Commission.
Background
The Commission agreed to enter into the settlement agreement without an admission taking the following factors, among others, into account:
- From October 2019, Computicket had terminated all impugned exclusivity provisions in its OTS contracts for events;
- The impact of COVID-19 on the travel, events and entertainment sectors and, accordingly, on Computicket’s business;
- The lapse of time since the initiation of the investigation, the likely extended trajectory of the litigation, related costs and risks and the changes in the events sector;
- The need to avoid protracted litigation; and
- The interests of justice and efficiency that the matter is finalised without further litigation.
The Commission’s investigation into this matter started in June 2013 when the firms were accused of abusing their dominance by concluding exclusive agreements with inventory providers in the entertainment industry during January 2013 – October 2019, which allegedly had the effect of foreclosing other firms in the market for OTS.
The Commission’s case was subsequently referred to the Tribunal for prosecution in December 2018. The Commission sought an order from the Tribunal declaring, among others:
- that Computicket and Shoprite constitute a single economic entity and therefore a firm for the purposes of the conduct forming the subject matter of the complaint referral;
- that the single economic entity contravened section 8(1)(d)(i), alternatively section 8(1)(c) of the Act i.e. abuse of dominance;
- that the exclusivity provisions in Computicket’s agreements with inventory providers contravene the Act;
- that Computicket and Shoprite are required to pay an administrative penalty, jointly and severally the one paying and the other to be absolved;
- that all the exclusivity clauses contained in the agreements concluded by Computicket with inventory providers are void and of no force or effect; and
- an order interdicting the respondents from entering into any further exclusive agreements with inventory providers in the relevant market.
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