The TAR Lazio, annulled a decision by which in 2020 the ICA had imposed a fine on CTS Eventim- TicketOne Group (“TicketOne”) for allegedly abusing its dominant position in the Italian market for the sale of tickets for pop and rock music concerts.[1]
Background
In 2001 TicketOne notified the ICA with two agreements it had entered into with some of the leading organizers of live music events (the “Panischi Agreements”), requesting confirmation that they fulfilled the requirements for exemption from the ban on anticompetitive practices. The Panischi Agreements, whose term was 15 years, comprised a concession agreement, under which TicketOne had the exclusive right to distribute online an increasing percentage of tickets for events organized by promoters, in consideration for a fixed fee of 15% of the ticket price; and a non-compete agreement between the parties. In 2002 the ICA took the view that the Panischi Agreements did not significantly restrict competition in the relevant markets.
In October 2017, in the wake of the expiry of the Panischi Agreements, the ICA sent a request for information to TicketOne, concerning its current relationships with promoters which had been parties to the Panischi Agreements; as well as with its biggest 20 customers (i.e., concert organizers and promoters), in particular, the existence of any exclusivity agreements. In September 2018, the ICA opened an investigation into TicketOne’s potential abuse of dominance.
The ICA Decision
On December 22, 2020, the ICA addressed to TicketOne a decision finding that it implemented a complex exclusionary abusive strategy aimed at significantly restricting sales of tickets for live pop and rock music events by competing ticketing operators.[2]
The ICA defined the relevant market as the national market for the sale, through any distribution channel, of tickets for pop and rock music concerts, which in its view was distinct from, but connected to, the upstream market for the organization, production and promotion of such concerts. TicketOne was found to hold a dominant position due to its large market share[3] compared to its competitors, and to the fact that it allegedly represented an unavoidable trading partner for producers, promoters and organizers of such concerts.
In the ICA’s view, TicketOne’s unlawful strategy comprised the following conduct: (i) entering into exclusivity agreements with producers and organizers of live music events; (ii) acquiring, between September 2017 and April 2018, four of the major national promoters;[4] (iii) imposing exclusivity clauses on local promoters; (iv) entering into commercial agreements with smaller ticketing operators, so as to prevent its competitors from dealing with them; as well as (v) taking retaliation and boycott measures against concert organizers Zed Entertainment’s World S.r.l. and Sol Eventi S.r.l. to punish them from entering into agreements with Ticketmaster, a competitor that TicketOne sought to exclude from the market.
In its defense in the course of the investigation, TicketOne argued that its acquisitions of certain promoters and its exclusivity agreements with producers and organizers of live music events, far from being abusive, were necessary in order for it to compete against the entry on the market of strong competitor Ticketmaster, but the ICA was not persuaded by this argument.
The ICA also established that TicketOne was allegedly able to charge higher ticket fees than its competitors, and its conduct limited consumers’ choice among various ticketing operators, so as to harm consumers.
In its decision, the ICA imposed on TicketOne a fine of approx. €10.8 million and ordered it to grant competing operators the possibility to sell – based on fair, reasonable and non-discriminatory conditions, by any means and through any channel – at least 20% of the total number of tickets for live music events produced or distributed by each promoter or ticketing operator tied to TicketOne by exclusivity agreements.
The Applications to the TAR Lazio
A number of companies belonging to the TicketOne Group[5] filed with the TAR Lazio seven separate applications for annulment of the ICA decision, claiming, inter alia, that: (i) the duration of the ICA’s preliminary investigation was excessively long; (ii) the ICA wrongfully established that TicketOne implemented a single exclusionary strategy, of which the actions referred to above were the individual components; and (iii) in particular, the ICA erroneously analyzed TicketOne’s acquisitions of the four major national promoters in the framework of that abusive strategy.
The TAR Lazio Judgment
The TAR Lazio upheld the applicants’ plea that the ICA failed to prove to the requisite legal standard the existence of a single exclusionary strategy against competing ticketing operators.
In particular, the TAR Lazio disagreed with the ICA’s finding that the four acquisitions represented a key element of the abusive conduct. The Court held, in this respect, that concentrations can only be assessed on the basis of the EU or the domestic legal framework for merger control and, therefore, cannot be deemed to be the key element of an abusive strategy. The TAR Lazio reasoned that, if competition authorities were allowed to apply Article 102 TFEU, or the corresponding domestic law provisions, to operations of concentration already completed, the risk would arise that the effects of such transactions may be challenged years after their clearance, in violation of the principles of legal certainty and the interested companies’ freedom of economic initiative.
However, the Court failed to consider that the four acquisitions carried out by TicketOne had not been notified to the European Commission or the ICA, as they did not meet the minimum thresholds for notification under Italian law, and the ICA became aware of their existence only on the basis of TicketOne’s reply to a request for information. Therefore, in the circumstances, the statement of reasons provided by the Court in support of its conclusion that the ICA lacked jurisdiction to include those transactions in its assessment of TicketOne’s exclusionary strategy under Article 102 TFEU, seems all but compelling.
[1] See TAR Lazio Judgment No. 3334 of March 24, 2022 and ICA Decision No. 28495 of December 22, 2020, Case A523 – TicketOne/Condotte escludenti nella vendita di biglietti.
[2] Such as VivaTicket S.p.A., Ticketmaster Italia S.r.l. (“Ticketmaster”), PGMR Italia S.r.l. and CiaoTickets S.r.l.
[3] Which, according to the ICA, equaled 60-65% by volume and 70-75% by value.
[4] Namely: Vertigo S.r.l., Friends & Partners S.p.A., Di and Gi S.r.l., and Vivo Concerti S.r.l.
[5] Namely: Vivo concerti S.r.l., Di and Gi S.r.l., Friends & Partners S.p.A., TicketOne S.p.A., F&P Group s.r.l., Vertigo S.r.l., and CTS Eventim AG & Co. KGaA.