On 4 December 2017, the German Federal Cartel Office ('FCO') issued a decision prohibiting CTS Eventim, a German ticketing system operator, from using exclusivity clauses stipulating that organisers of live entertainment events and advance booking offices have to sell their tickets exclusively or at least to a large extent via CTS Eventim's ticketing system. According to the FCO, CTS Eventim otherwise is abusing its dominant position. The company now has four months to amend its contracts.
The FCO found that CTS Eventim holds a dominant position since it operates the largest ticketing system in Germany, which sells more than 60% of all tickets sold via ticketing systems.
The FCO also considered that CTS Eventim's dominant position is strengthened by the characteristics of a ticketing system. A ticketing system is a two-sided (online) platform: on one side enabling event organisers to sell their tickets via multiple intermediaries (such as advance booking offices and online shops) and on the other side enabling advance booking offices to book tickets for different events. As with most two-sided markets, this means that the more the ticketing system is used by event organisers the more it also becomes indispensable for advance booking offices and end customers (so-called indirect network effects). Given their wider reach compared to other selling channels, the FCO found that ticketing systems are essential for many event organisers.
The FCO was concerned that CTS Eventim had abused its dominant position by using clauses obliging its contractual partners to sell tickets exclusively or to a "considerable" extent via CTS Eventim's ticketing system, which may lead to market foreclosure of competing ticketing systems. Therefore, the FCO ordered CTS Eventim to amend their exclusivity clauses in a manner that allows contracting partners to sell at least 20% of their annual ticket volume via other ticketing systems in cases where the contracts have an indefinite or a term for more than two years.
CTS Eventim has announced that it will appeal the FCO decision arguing that the FCO did not take sufficient account of increasing competition from numerous foreign and domestic digital players.
The FCO decision regarding CTS Eventim's exclusivity clauses is not the only setback for CTS Eventim in Germany. Last month, the
FCO prohibited CTS Eventim's planned acquisition of Four Artists, a concert and event organiser, arguing that CTS Eventim would gain access to considerable additional ticket volumes and would further strengthen its market dominant position to the detriment of customers.
Co-author: Franziska Sauer
All articles in the December edition of the Competition newsletter
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