South African ticketing site Computicket and its parent company, Shoprite Checkers, have been accused of anticompetitive behaviour and face prosecution.
The SA Competition Commission claims the companies signed and enforced exclusive agreements in violation of the Competition Act, and has referred Computicket and its parent to the Competition Tribunal for prosecution.
A statement, released yesterday (Thursday), said: “These agreements, with anticompetitive features, were concluded by Computicket with inventory providers in the entertainment industry from 2013 to date.
“In terms of the agreements, Computicket is appointed as the sole provider of ticketing services to the inventory provider or customer in question.”
After being acquired by Shoprite Checkers in 2005, Computicket’s exclusive contracts changed to a standard three-year period, with the agreements staggered based on when they were signed.
“In these agreements, Computicket has the ability to price-discriminate between its large and small inventory provider customers,” the commission said. “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 it, to the exclusion of its competitors, in the event that such third parties contract with Computicket’s customer.”
According to the commission, Computicket’s larger customers are able to negotiate better rates than smaller customers, based on their size.
It added: “This allows Computicket to isolate the competitive pressure arising from those inventory providers who may find the option of self-supply more attractive.”
An administrative penalty of 10 per cent of the firms’ annual turnover has been recommended by the commission.
In an e-mail to TechCentral, Computicket and Shoprite Checkers said they have studied the referral by the commission and “disagree with the basis” for it. A statement read: “In terms of the Competition Act, the respondent companies may answer the referral within 20 business days after being served with the referral. Opposing affidavits will be filed by the respondent companies within the required time frames.”