In another blow to Shoprite, the Constitutional Court has ruled against the retailer amid a fight with the competition authorities over its ticketing business Computicket.
The Competition Commission is prosecuting Computicket, which issues tickets for entertainment events, bus, flights, hotel accommodation and holiday packages. It alleges that Computicket entered into exclusive agreements with the majority of inventory providers (like theatre owners, promoters and other event organisers) between 2013 and 2018, and that it was then the sole provider of ticketing services to these inventory providers.
This excludes competitors of Computicket from the market, the commission said in a statement.
"Furthermore, the Commission found that after Shoprite had acquired Computicket in 2005, it played a key role in influencing Computicket’s behaviour in entering into exclusive agreements with inventory providers."
It therefore decided to prosecute both Computicket and Shoprite for engaging in abuse of dominance by excluding its competitors from the market through these exclusive agreements.
But Shoprite challenged this at the Competition Tribunal, saying that the commission could not prosecute both a parent company and its subsidiary for abuse of dominance. The tribunal found in Shoprite’s favour – but the commission referred the case to the Competition Appeal Court, which upheld the prosecution. Shoprite then turned to the Constitutional Court, unsuccessfully.
In a statement, the commission welcomed the Constitutional Court’s decision to dismiss, with costs, Shoprite’s application for leave to appeal against a judgement and order of the Competition Appeal Court in favour of the commission.
"The net effect of the Constitutional Court’s decision is that the Commission will be able to continue with its prosecution of both Computicket and Shoprite in the Competition Tribunal."
But Shoprite said in its reaction that "notwithstanding the dismissal of the Shoprite Checkers application for leave to appeal by the Constitutional Court, the Competition Commission is still under an obligation to amend its complaint referral in accordance with a Competition Tribunal ruling handed down during April 2020".
"The merits of the case can only be heard by the Competition Tribunal once the Competition Commission has amended its complaint referral as ordered."
This is the second time that Computicket is in the crosshairs of the competition authorities.
In 2019, Computicket was forced to pay a fine of R20 million after it was found guilty of abuse of dominance by entering into exclusive distribution agreements between 2005 and 2010.
The article has been updated with Shoprite's response.