Ticketek Pty Ltd penalised $2.5 million for misusing its market power
The Federal Court in Sydney has penalised Ticketek Pty Ltd $2.5 million for taking advantage of its market power following action by the Australian Competition and Consumer Commission.
The Court found that on four separate occasions Ticketek engaged in conduct with the anti-competitive purpose of deterring or preventing Lasttix from supplying its services. Lasttix offers promotional services to event organisers to target consumers wanting to buy 'last minute' discounted tickets.
Event organisers, including major concert promoters and theatre producers, had requested Ticketek set up special discount ticket deals to be promoted by the newly established Lasttix. These deals included shows by celebrities including 'Dr Phil' and Liza Minelli.
Ticketek admitted that it would typically set up and honour these types of deals when asked by event organisers. However, on four occasions Ticketek failed to do so because the deals were to be promoted by Lasttix.
"Ticketek's market strength allowed it to do things it may not have done in a more competitive environment. Their behaviour towards Lasttix was opportunistic, anti-competitive and was found by the Court to be unacceptable," ACCC chairman Rod Sims said.
On one occasion, in early 2010 Ticketek had created a special deal with an associated URL link in their system for the 'Warriors of Brazil' production at Sydney's Theatre Royal. Ticketek shut down access to the deal upon becoming aware that it was being promoted by Lasttix. Ticketek reinstated access to the deal only after repeated requests from the shows producers to make it accessible.
In declaring the conduct had contravened the Act, Justice Bennett said "The four incidents comprising the conduct were not accidental. They each arose due to a deliberate decision and, apparently reflected a policy or practice not limited geographically within Australia. The conduct was engaged in by both lower level employees and by more senior management."
"With online technologies changing competitive dynamics, a business may attempt to capitalise on some of these uncertainties to damage their competition. This decision of the Court clearly states that they cannot. The ACCC's response to this conduct will ensure that event organisers have more choices in promoting their shows." Mr Sims said.
"Consumers will also benefit from discount ticket deals becoming increasingly accessible in a variety of places, not just through ticketing agents."
"This action serves as a reminder to all businesses that illegal anti-competitive behaviour, of any type, will not be tolerated. The penalty imposed by the Court indicates the seriousness with which this conduct is viewed."
Three occasions of refusing the event organisers requests in 2009 each attracted a penalty of $725,000. The conduct in 2010 in which Ticketek temporarily shut down the deal attracted a penalty of $325,000. Ticketek admitted that they had engaged in conduct in contravention of section 46 of the Trade Practices Act and consented to the penalties imposed by the Court.
An investigation into Ticketek's conduct commenced in 2010 and the ACCC acknowledges Ticketek's cooperation. The penalties imposed by the Court included a discount reflective of the cooperation provided by Ticketek.
"...it is in the public interest for the Court to make orders in Part IV litigation on the terms that have been agreed between the parties, so as to encourage parties to assist the Commission in its investigations…" Justice Bennett said in her decision.
"Where businesses have done something that may breach the Act we encourage them to cooperate with the ACCC in its investigation. This is often the quickest and most effective way of resolving a matter," Mr Sims said.