The Competition Appeal Court has dismissed, with costs, an appeal by Computicket against a Competition Tribunal ruling that it should pay a R20m penalty for abuse of market dominance.
Judge Nolwazi Boqwana delivered the judgment on Wednesday. The matter dates back to February 2008, when rivals of Computicket first approached the Competition Commission to complain about the ticketing agent's market dominance.
In January this year, the Tribunal ordered the online ticket service provider to pay a R20m fine for abuse of market dominance between 2005 and 2011. Computicket said it would appeal the ruling, Fin24 previously reported.
Computicket, owned by Shoprite, acts as a ticketing agent for inventory providers - these are theatre owners, theatre producers, sporting events and entertainment events.
While the Competition Tribunal found that Computicket's exclusive agreements with inventory providers had an exclusionary effect in the market, the appeals court said it was important to determine if this conduct by Computicket was anti-competitive.
"To return to the evidence, it is not disputed that exclusive dealings can lead to foreclosure of competitors and harm consumers. What is in dispute is whether the conduct of Computicket significantly effected (sic) competition in the market."
Boqwana highlighted that the Tribunal found Computicket either enforced or threatened to enforce the exclusivity clause of its contracts strictly.
The exclusivity clause is such that if an inventory provider uses the services of a competing ticketing agent, it may face legal action for breaching the exclusivity clause with Computicket. In turn, Computicket also refused to enter into non-exclusive agreements.
"In summary, I am persuaded that not only was the exclusionary act substantial in terms of foreclosing on market rivals, there is evidence pointing to actual harm on consumers," the judgment read. "No pro-competitive efficiencies were established."
R20m considered fair
Computicket also contended that the Tribunal could not charge it a penalty almost 10% of its turnover. It submitted that the Commission's evidence of foreclosure only related to 3% of the market - which was the theatre market. Boqwana said this submission could not be sustained as the evidence presented in the case applied across all inventory providers.
Boqwana said the Tribunal had thoroughly explained the methodology in deriving the R20m penalty. "Having considered the submissions made on appeal, in relation to penalty, I find no basis to interfere with the Tribunal's discretion."