Italy: CTS Eventim – Ticketone abuse of dominance in Italy: the show must go on!

On 24 October 2022, the Italian Supreme Administrative Court (“Consiglio di Stato” or “CdS”) affirmed the Tar Lazio judgment, which annulled the Italian Competition Authority (“ICA”) decision to impose a fine of 10.9 million euros on CTS Eventim – Ticketone for abuse of a dominant position in the market for live event ticket sales in Italy.

According to the ICA, the CTS Eventim – Ticket0ne group deployed a unitary and complex strategy, which included: 

• exclusive agreements concluded by the Eventim – Ticketone group with the main national event promoters;
• imposition of exclusivity clauses on local event promoters;
• agreements entered into by the Eventim - Ticketone group with smaller local ticketing operators requiring them to sell tickets exclusively through Ticket One's automated ticketing system;
• boycotting of competitors (e.g., against ZED Entertainment World S.r.l. (“ZED”), following its refusal to enter into an exclusive agreement with Ticketone), with the aim of preventing promoters from turning to competing ticketing operators;
• the acquisition by the CTS Eventim - Ticketone group of four of the main national event promoters.

According to the CdS, the contested practices — in particular the acquisitions and related exclusivity clauses — may plausibly be objectively justified and do not necessarily result in an unlawful restriction, taking into account the criteria of proportionality and reasonableness.

In the CdS’s judgment, the ICA must satisfy the court of the existence of an exclusionary purpose linking together the conducts in question. The dominant undertaking may indeed prove that the exclusionary practice does not fall within the prohibition under Article 102 TFEU if the effects of the conduct produce advantages for consumers in terms of choice, price and innovation. 

The CdS found that the ICA had in fact failed to examine sufficiently the applicants' defence of the existence of a lawful purpose pursued by the acquisitions (offering an integrated service to the artists ranging from the organisation to the promotion and ticketing of live events).

Such lack of enquiry by the ICA related in particular to the effects of the contested conduct, aimed at the market for live event promotion rather than at the ticketing market.

In the CdS’s view, the contested acquisitions were explicitly aimed at mitigating the expansion of the Live Nation/TicketMaster group, which had begun to pursue ticketing activities in Italy expanding its presence from the live event promotion market.

The aim of the acquisitions made by CTS Eventim - Ticketone was therefore to vertically integrate itself by expanding into the live event promotion market, in order to be able to offer artists a unified service for the management of live events. Hence, the pursuit of a new business model. According to the logic of the CdS, the acquisitions made by Ticketone were therefore indispensable in order to resist the market entry of TicketMaster.

Therefore, according to the CdS, it was necessary for the ICA to conduct further investigation into the defence put forward by CTS Eventim – Ticketone, especially as to the real purpose of the acquisitions in relation to the market entry of a vertically integrated competitor group.

The CdS further stressed that the ICA should also have looked at the live event promotion market, bearing in mind that the settled EU case law has repeatedly stated that dominant companies may defend themselves against their competitors, but must do so by means of 'normal' competition, i.e. competition based on the merits.

Only such an in-depth examination of the critical issues highlighted by the CdS may lead to a confirmation or review of the decision initially adopted by the ICA against CTS Eventim – Ticketone.

On the other hand, the CdS confirmed that the retaliatory conduct and boycotts implemented against other operators such as ZED, may in fact constitute abuses of dominance requiring further investigations by the ICA and possible revision of the fine initially imposed on CTS Eventim – Ticketone.

Finally, the CdS did not accept the position of TAR Lazio with regard to the interaction between the EU Merger Regulation and Articles 101 and 102 TFEU. 

The CdS, based on settled EU case law, underlined that in fact a merger operation that does not fall within the scope of ex ante merger control (i.e.: because it falls below the relevant thresholds) may well be assessed ex post according to the ordinary antitrust law instruments.

Whilst the CdS decision dutifully sheds light on the contested interlinks between Article 102 TFEU and EU merger rules, the ultimate decision on the contested conducts put in place by CTS Eventim – Ticketone is once more in the hands of the ICA. 

The show must go on (again). Make sure you have a ticket for season 2.

The CdS judgment is available (in Italian) only. 

For more information, please contact Federico Marini Balestra, Lucia Antonazzi and Chiara Horgan.

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