Australian Competition and Consumer Commission v Ticketek Pty Ltd [2011] FCA 1489 (22 December 2011)

Last Updated: 22 December 2011

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Ticketek Pty Ltd

[2011] FCA 1489

Citation:		Australian Competition and Consumer Commission v Ticketek Pty Ltd [2011] FCA 1489
Parties:		AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TICKETEK PTY LTD ACN 010 129 110
File number:		NSD 2166 of 2011
Judge:		BENNETT J
Date of judgment:		22 December 2011
Catchwords:		TRADE PRACTICES – parties jointly seek declarations and pecuniary penalties in respect of conduct contravening s 46(1)(c) of Trade Practices Act 1974 (Cth) – whether to grant declarations – whether to make order for payment of pecuniary penalty
Legislation:		Trade Practices Act 1974 (Cth) ss 46(1)(c) and 76(1)(a)(i)
Cases cited:		ACCC v ABB Transmission and Distribution Limited [2001] FCA 383; (2001) ATPR 41-815 cited ACCC v Korean Air Lines Co Ltd [2011] FCA 1360 cited ACCC v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254; (2005) 215 ALR 281 cited ACCC v Midland Brick Co Pty Ltd (2004) 207 ALR 329 cited ACCC v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 161 ALR 79 cited ACCC v SIP Australia Pty Ltd [1999] FCA 858; (1999) ATPR 41-702 cited J McPhee & Son (Australia) Pty Ltd v ACCC [2000] FCA 365; (2000) 172 ALR 532 cited Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; (2004) ATPR 41-993 cited NW Frozen Foods Pty Ltd v ACCC [1996] FCA 1134; (1996) 71 FCR 285 applied Rural Press Ltd v ACCC [2003] HCA 75; (2003) 216 CLR 53 applied TPC v Allied Mills Industries Pty Ltd (No 4) [1981] FCA 156; (1981) 37 ALR 256 cited TPC v CSR Ltd (1991) ATPR 41-076 applied TPC v Stihl Chain Saws (Aust) Pty Limited Ltd (1978) ATPR 40-091 cited
Date of hearing:	16 December 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	60
Counsel for the Applicant:	Mr S Free
Solicitor for the Applicant:	Corrs Chambers Westgarth
Counsel for the Respondent:	Mr P Brereton SC
Solicitor for the Respondent:	Gilbert + Tobin

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 2166 of 2011

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	TICKETEK PTY LTD ACN 010 129 110 Respondent

JUDGE:	BENNETT J
DATE OF ORDER:	22 DECEMBER 2011
WHERE MADE:	SYDNEY

BY CONSENT THE COURT DECLARES THAT:

1. On 17 July 2009 Ticketek Pty Ltd (Ticketek) contravened s 46(1)(c) of the Trade Practices Act 1974 (Cth) (the Act), since 1 January 2011 named the Competition and Consumer Act 2010 (Cth), by refusing a request to it by Andrew McManus Presents Pty Ltd and the Melbourne and Olympic Parks Trust to implement in its ticketing system called “Softix” (Ticketing System) discounted price types to be published by Lasttix Pty Ltd (Lasttix) for the Australian tour of ‘Dr Phil’ (the AM Presents Refusal) and did, thereby, take advantage of Ticketek’s substantial degree of power in the Australia wide market for the sale and acquisition of ticketing related services (Ticketing Related Services Market) for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct in the Ticketing Related Services Market.
2. On or around 14 October 2009 and on 17 October 2009 Ticketek contravened
   s 46(1)(c) of the Act by refusing requests to it by Chugg Entertainment Pty Ltd to implement in its Ticketing System discounted price types to be published by Lasttix for the production called ‘World Dog Games’ and a concert tour of the artist Liza Minelli (together the Chugg Refusal) and did, thereby, take advantage of Ticketek’s substantial degree of power in the Ticketing Related Services Market for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct in the Ticketing Related Services Market.
3. On 15 October 2009 Ticketek contravened s 46(1)(c) of the Act by refusing a request to it by Andrew Kay & Associates Pty Ltd to implement in its Ticketing System discounted price types to be published by Lasttix for the production called ‘Les Ballets Trockadero De Monte Carlo’ (the AKA Refusal) and did, thereby, take advantage of Ticketek’s substantial degree of power in the Ticketing Related Services Market for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct in the Ticketing Related Services Market.
4. On or around 19 January 2010 Ticketek contravened s 46(1)(c) of the Act by temporarily removing from its Ticketing System discounted price types that were published or to be published by Lasttix for the production called ‘Warriors of Brazil’ (the KMP Removal) and did, thereby, take advantage of Ticketek’s substantial degree of power in the Ticketing Related Services Market for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct in the Ticketing Related Services Market.

BY CONSENT THE COURT ORDERS THAT:

5. Ticketek pay to the Commonwealth of Australia the following pecuniary penalties in respect of the contraventions of s 46 of the Act:

(a) declared in paragraph 1 for the AM Presents Refusal in the sum of $725,000;

(b) declared in paragraph 2 for the Chugg Refusal in the sum of $725,000;

(c) declared in paragraph 3 for the AKA Refusal in the sum of $725,000; and

(d) declared in paragraph 4 for the KMP Removal in the sum of $325,000,

such penalties to be paid within 45 days of the date of the making of this order.

6. Ticketek pay a contribution to the Applicant’s costs of and incidental to this proceeding in the agreed sum of $100,000 within 45 days of the date of the making of this order.
   

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 2166 of 2011

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	TICKETEK PTY LTD ACN 010 129 110 Respondent

JUDGE:	BENNETT J
DATE:	22 DECEMBER 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In these proceedings, the applicant (the Commission) alleges that the respondent (Ticketek) contravened s 46(1)(c) of the Trade Practices Act 1974 (Cth) (the Act) in respect of conduct which took place between 1 July 2009 and 19 January 2010 (the Relevant Period).
2. The conduct is set out in the Statement of Agreed Facts, which is Annexure A to these reasons. The Statement of Agreed Facts, signed by the solicitor of each of the respective parties, is provided in accordance with s 191 of the Evidence Act 1995 (Cth). The facts agreed to, and admissions made in the Statement of Agreed Facts, are agreed to have been made for the purpose of this proceeding only. I accept the facts stated therein.
3. Terms used in these reasons have the same meaning as in the Statement of Agreed Facts unless otherwise stated.
4. It is agreed that, by its conduct in the Relevant Period, Ticketek took advantage of its substantial degree of market power in the Ticketing Related Services Market for the substantial purpose of deterring or preventing Lasttix, a competitor, from engaging in competitive conduct in that market, by:
   1. refusing, on three occasions, to implement in its Ticketing System discounted Price Types to be published by Lasttix when requested to implement those Price Types by Promoters or Venue Operators; and
   2. removing, on one occasion, from its Ticketing System, discounted Price Types that were published or to be published by Lasttix.
5. The parties agree that the conduct set out in the Statement of Agreed Facts contravened s 46(1)(c) of the Act.
6. By consent, the parties seek declarations and orders in respect of Ticketek’s conduct. Pursuant to s 76(1)(a)(i) of the Act, the Court is empowered to make orders for the payment of a pecuniary penalty for the contravention of s 46(1)(c) of the Act. The parties have reached agreement as to the pecuniary penalty to be recommended to the Court for its consideration. The parties made joint submissions in support of the proposed penalty.
7. Notwithstanding the Statement of Agreed Facts and the joint submissions, it is for the Court to determine whether the contraventions occurred, the quantum of any pecuniary penalties and any other relief that should be ordered.

SUMMARY OF AGREED FACTS

8. The following is only a broad summary of the conduct as set out in the Statement of Agreed Facts. It is not intended to replace those facts, nor does it set out all relevant matters. It is, however, useful in order to understand the consideration of penalty that follows.
9. The conduct, on four separate occasions, took place over a period of approximately six months. In each case Ticketek took action in respect of deterring or preventing a competitor, Lasttix, from engaging in competitive conduct in the Ticketing Related Services Market.
10. During the Relevant Period, Ticketek provided end-to-end ticketing solutions to clients, being a Venue Operator or Promoter, through the supply of Ticketing Related Services. That concerned selling and distributing tickets for live entertainment events. The majority of Ticketing Services Agreements to which Ticketek was a party during the Relevant Period granted Ticketek the exclusive rights to print, prepare, sell and distribute tickets at the particular venue or event which was the subject of the Ticketing Services Agreement.
11. Ticketek supplied many of the Ticketing Related Services under its Ticketing Services Agreements using the Ticketing System, which was designed, owned and developed by Ticketek. The Ticketing System allowed for the ticketing of events and for various Price Types for a particular event.
12. During the Relevant Period, Lasttix’s primary means of promoting the sale of tickets was through the provision of services to Promoters in relation to discount ticket offers for events.
13. In July 2009, the Promoter and the Venue Operator for a show called “Dr Phil” Event (Andrew McManus Presents Pty Ltd and the Melbourne and Olympic Parks Trust respectively) requested Ticketek to implement in its Ticketing System a discounted Price Type for the Dr Phil Event to be published exclusively by Lasttix. Ticketek, by its State Manager of Victoria, refused to implement that request on the basis that the price was cheaper than the current discounted tickets that Ticketek were selling for this event. I was informed that the State Manager of Victoria, despite the title, is not a senior management person within Ticketek.
14. In October 2009, the Promoter of “World Dog Games” and a concert tour of Liza Minelli (Chugg Entertainment Pty Ltd) requested Ticketek to implement in its Ticketing System discounted Price Types to be published by Lasttix in connection with each of those events. Ticketek, through its Business Development Manger, refused that request. I was informed that the Business Development Manager is a senior management person within Ticketek.
15. In October 2009, the Promoter of a production called “Les Ballets Trockadero de Monte Carlo” (Andrew Kay & Associates Pty Ltd), known as “the Trocks”, requested Ticketek to implement in its Ticketing System a discounted Price Type to be published by Lasttix in connection with the Trocks Event. Ticketek, by its Account Manager, refused the request on the basis that Lasttix was a competitor. I was informed that an Account Manager is not a senior management person within Ticketek.
16. In January 2010, the Promoter of a production called “Warriors of Brazil” (Kay and McLean Productions Pty Ltd) requested Ticketek to implement in its Ticketing System a discount Price Type which facilitated access to tickets to performances of Warriors of Brazil at a discounted price. Ticketek prepared and issued Price Type URLs to the Promoter accordingly. The Promoter provided these Price Type URLs to Lasttix. When Ticketek became aware that Lasttix was publishing discounted ticket offers and was linking its website to the Price Type URLs which Ticketek had implemented for the Promoter, Ticketek disabled the relevant Price Types. This was communicated to the Promoter by a Ticketek Account Manager. After further discussions, Ticketek senior management, through the State Manager of NSW, reinstated the discounted Price Type on certain conditions, including that it set no precedent.
17. Ticketek admits, for the purposes of these proceedings only, that it took advantage of its substantial degree of market power in the Ticketing Related Services Market for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct in that market.
18. It is also relevant that, during the Relevant Period, Lasttix provided only one part of the services contained within the Ticketing Related Services provided by Ticketek, namely the provision of services to promote the sale of tickets including, but not limited, to publishing the details and prices of events through various channels. During the Relevant Period, service providers with the capability and scale to provide full service across Australia included Ticketek and Ticketmaster Australasia Pty Ltd. There have been developments since the Relevant Period such that Ticketek’s admission that it had a substantial degree of market power in the Ticketing Related Services Market is confined to the Relevant Period.

DECLARATIONS

19. I have had regard to the agreed facts, the joint written submissions and the oral submissions of counsel for both parties, who have endorsed the agreed facts and the proposed consent orders. I am satisfied that there has been a contravention of the Act.
20. The declarations sought contain sufficient information as to how and why the conduct complained of is a contravention of the Act. They indicate “the gist” of the contravening conduct (Rural Press Ltd v ACCC [2003] HCA 75; (2003) 216 CLR 53 at [89]–[91] per Gummow, Hayne and Heydon JJ, Gleeson CJ and Callinan J agreeing at [2]).
21. I am satisfied that the proposed declarations are appropriate.

PENALTY

22. The joint submissions have addressed the factors relevant to a consideration of penalty. I have drawn from the submissions as appropriate and the facts referred to below are agreed. It is not necessary to go into a detailed analysis of the relevant principles and the reasons for them. They have been well accepted and regularly applied.

Relevant factors

23. Section 76 of the Act sets out matters to which the Court should have regard in determining an appropriate level of penalty. The principles relevant to the assessment of a pecuniary penalty were addressed by French J (as he then was) in TPC v CSR Ltd (1991) ATPR 41-076 at 52,152 - 52,153. They were identified as follows:

(a) the nature and extent of the contravening conduct;

(b) the amount of loss or damage caused;

(c) the circumstances in which the conduct took place;

(d) the size of the contravening company;

(e) the degree of power it has, as evidenced by its market share and ease of entry into the market;

(f) the deliberateness of the contravention and the period over which it extended;

(g) whether the contravention arose out of the conduct of senior management or at a lower level;

(h) whether the company has a corporate culture conducive to compliance with the Act as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; and

(i) whether the company has shown disposition to cooperate with the authorities responsible for the enforcement of the Act in relation to the contravention.

24. Those considerations were approved and expanded upon by the Full Court in NW Frozen Foods Pty Ltd v ACCC [1996] FCA 1134; (1996) 71 FCR 285 and J McPhee & Son (Australia) Pty Ltd v ACCC [2000] FCA 365; (2000) 172 ALR 532 as follows:

(a) similar conduct in the past;

(b) effect on the functioning of the market and other economic effects of the conduct;

(c) the financial position of the contravening company; and

(d) whether the conduct was systematic, deliberate or covert.

25. In NW Frozen Foods, Burchett and Kiefel JJ (Carr J agreeing) noted at 295 that similar contraventions of the Act should incur similar penalties, other things being equal. However, their Honours cautioned that ‘other things are rarely equal where contraventions of the... Act are concerned’.

Deterrence

26. It has long been accepted that a principal object of a penalty under s 76 is deterrence (see, for example, TPC v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 40-091 at 17,896 per Smithers J). In TPC v CSR, French J stated at 52,152:

The principal, and I think probably the only, object of the penalties imposed by s.76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the Act.

27. This approach, approved by Burchett and Kiefel JJ in NW Frozen Foods Pty Ltd, requires consideration of specific deterrence, in respect of the actual contravener, and general deterrence of others. General deterrence requires that for a penalty to have the desired effect, it must be imposed at a meaningful level (ACCC v ABB Transmission and Distribution Limited [2001] FCA 383; (2001) ATPR 41-815 at [13]).
28. In ACCC v Midland Brick Co Pty Ltd (2004) 207 ALR 329 Lee J said at [22]:

The object of orders made under s 76, or s 80, of the Act is to protect the integrity of markets and to prevent the subversion and distortion thereof by conduct that has the purpose or effect of adversely affecting competition. The Act sets out the norms to be met by corporations engaged in trade or commerce and in the main seeks to obtain adherence to those standards by providing for penalties to be imposed, and injunctions to be granted, that will be sufficient to deter corporations from risking, whether deliberately or negligently, the consequence of contravening the Act.

29. As to specific deterrence, a penalty must not be so high as to be oppressive (Stihl Chain Saws per Smithers J at 17,896 and NW Frozen Foods at 293). A penalty that is no greater than is necessary to achieve the object of general deterrence will not be oppressive (ACCC v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254; (2005) 215 ALR 281 per Merkel J at [9]). In this regard, it is appropriate to have regard to a penalty jointly proposed by the contravener and the Commission as the regulatory body (ACCC v Korean Air Lines Co Ltd [2011] FCA 1360 per Stone J at [21]).

Relevance of agreed orders

30. Litigation to establish contraventions of Part IV of the Act, in particular s 46 contraventions, can be very complex, time consuming and costly. It is in the public interest for litigation under Part IV of the Act (as with other litigation) to be concluded in the shortest time frame that is consistent with justice being done between the parties, freeing the Court and the Commission to deal with other matters. To that end, the Court has looked with favour upon negotiated settlements, provided that their terms recognise that the ultimate responsibility for the terms and making of the orders that resolve the proceedings lies with the Court (see TPC v TNT Australia Pty Ltd (1995) ATPR 41-375; NW Frozen Foods).
31. Provided that the Court is satisfied that the terms of the orders are appropriate, it is in the public interest for the Court to make orders in Part IV litigation on the terms that have been agreed between parties, so as to encourage parties to assist the Commission in its investigations and achieve negotiated settlements. The Court has recognised that, in addition to savings in time and costs, there is a public benefit in imposing agreed pecuniary penalties where appropriate as parties would not be disposed to reach such agreements were there unpredictable risks involved (NW Frozen Foods at 291).
32. The Commission’s position is that making the public aware of the manner in which co-operation and assistance by parties is recognised (such as by making joint submissions to the Court for a reduction of penalty) encourages parties in breach to come forward to assist the Commission in its enforcement activities. The Commission’s position is contained in the ACCC Cooperation Policy for Enforcement Matters, July 2002 (the Policy). While the Court is not required to take the Policy into account in any given case, it has recognised (in relation to a previous edition of the Policy) that the matters which the Policy takes into consideration are matters relevant to a determination of the appropriate penalties to be imposed for contravention of Part IV of the Act (ACCC v SIP Australia Pty Ltd [1999] FCA 858; (1999) ATPR 41-702 at [32]).
33. The principles governing whether a Court should accept a penalty that has been agreed between the Commission and a respondent were considered in TPC v Allied Mills Industries Pty Ltd (No 4) [1981] FCA 156; (1981) 37 ALR 256 by Sheppard J, whose approach was considered and approved by the Full Court in NW Frozen Foods. The Full Court said at 298-299:

We agree with the statement made in several of the cases cited that it is not actually useful to investigate whether, unaided by the agreement of the parties, we would have arrived at the very figure they propose. The question is not that; it is simply whether, in the performance of the Court's duty under s 76, this particular penalty, proposed with the consent of the corporation involved and of the Commission, is one that the Court should determine to be appropriate.

34. The Full Court further stated at 291:

... a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case.

35. The Full Court also noted at 290 that, generally, the most significant and relevant matters that the Court needs to consider about penalty are effects upon the functioning of markets and other economic effects. Although the Court is responsible for determining the appropriate penalty, the Full Court considered that it would be informed by the views of the Commission about those effects. The decision of the Full Court in NW Frozen Foods was more recently considered and approved by the Full Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; (2004) ATPR 41-993.
36. As French J said in ACCC v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 161 ALR 79 at [18]:

The question whether an undertaking is to be accepted or a consent order made is not concluded by a finding that it is within the power of the court to do so. The power of the court to make the orders sought is “defined and conferred by public law not by private agreement”: Fiss, “Against Settlement” (1984) 93 Yale Law Journal 1073. In the exercise of that power the court is not merely giving effect to the wishes of the parties, it is exercising a public function and must have regard to the public interest in doing so. This principle applies to the resolution of private litigation by consent orders or undertakings. A fortiori it applies to proceedings brought by the Crown or public or statutory authorities to enforce the law in the public interest. The court has a responsibility to be satisfied that what is proposed is not contrary to the public interest and is at least consistent with it... Consideration of the public interest, however, must also weigh the desirability of non-litigious resolution of enforcement proceedings...

Consideration of the factors relevant to consideration of penalty in these proceedings

The nature and extent of the contravening conduct and the context in which it occurred

37. The conduct the subject of these proceedings comprised four occurrences occurring in the Relevant Period. Three occurrences, which took place between July 2009 and October 2009, constituted a refusal to implement a discounted Price Type to be published by Lasttix. The remaining occurrence, on 19 January 2010, constituted a temporary removal of a Price Type to be published by Lasttix, for a period of several hours. The temporary nature of the “removal” conduct distinguishes it from the three occurrences of “refusal” conduct and justifies a smaller penalty in respect of that conduct, as the parties have jointly submitted (see below at [57]).
38. The conduct occurred in a context where Lasttix and Ticketek were competitors in the provision of certain Ticketing Related Services. The conduct was materially facilitated by Ticketek’s substantial degree of market power in respect of the Ticketing Related Services Market during the Relevant Period as described in [76] of the Statement of Agreed Facts, and was engaged in with the substantial purpose of deterring or preventing Lasttix from engaging in the provision of certain competing Ticketing Related Services.
39. While the nature of Ticketek’s conduct in contravention of s 46 of the Act is serious, the extent of this conduct, especially in the context of Ticketek’s business activities, was limited. The events relevant to the four occurrences of conduct represented only 4 of 2028 events for which Ticketek sold tickets during the Relevant Period.

The amount of loss or damage caused

40. In each of the four occurrences of conduct (albeit temporarily in the case of the “removal” occurrence):

(a) Promoters’ and Venue Operators’ requests to enable Lasttix Price Types were denied; and

(b) Lasttix was denied the ability to provide its services by means of Price Types enabled by Ticketek.

41. Lasttix does, however, continue to operate its business and there has been no ongoing damage to Lasttix as a result of the conduct.

The deliberateness of the contravention and whether the contravention arose out of the conduct of senior management or at a lower level

42. 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 both by lower level employees and by more senior management. There is no dispute that certain senior management within Ticketek were aware of the conduct. This is particularly relevant to questions of specific deterrence.

The size and financial position of the contravening company

43. During the financial year within which the relevant conduct occurred, being financial year 2009/2010, Ticketek provided Ticketing Related Services in relation to 2,989 events held at venues throughout Australia and in doing so sold a substantial amount of tickets, the number of which was provided to the Court on a confidential basis. Ticketek’s total revenue for 2009/2010 was substantial and was provided to the Court confidentially.
44. In the financial year immediately prior to that within which the relevant conduct occurred, being financial year 2008/2009, Ticketek also sold substantial numbers of tickets for a total revenue figure that was also substantial.
45. The Court was not provided with net profit figures. Ticketek was content for the revenue figures to be taken into account. There is no suggestion that the proposed penalties are oppressive.

Whether the company has a corporate culture conducive to compliance with the Act as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention

46. Ticketek had a comprehensive compliance program in place prior to the relevant conduct occurring and devotes substantial resources to its continued implementation.
47. The details of Ticketek’s compliance program is contained within the “Competition and Consumer Practices Policy” (Compliance Policy) of Nine Entertainment Co Group (NEC) which had been adopted by NEC and each of its wholly owned subsidiaries, including Ticketek, at the time of the conduct. The Compliance Policy is reviewed and revised periodically.
48. Ticketek’s Compliance Policy addresses the type of conduct which is the subject of these proceedings and includes:

(a) a detailed delegation of the compliance responsibilities as between the Compliance Manager, individual managers and all employees and executives;

(b) details on the implementation of competition and consumer practices compliance training to be undertaken by relevant employees, including an on-line training program, testing to confirm comprehension of relevant obligations, ad hoc fact to fact training, record keeping of attendance at or completion of training, and inclusion of the program in induction of employees;

(c) details of the relevant avenues for complaint handling in relation to competition and consumer practices issues complaints;

(d) details of the policy and protection to be afforded to “whistleblowers”;

(e) details of the sanctions for staff who engage in breaches;

(f) details on how the compliance programs are to be monitored and reviewed; and

(g) details on the reporting mechanism of compliance issues to senior executives.

49. It is surprising that, despite the existence of a comprehensive Compliance Policy, the repeated contraventions outlined above and detailed in the Statement of Agreed Facts occurred. It suggests that the Compliance Policy was not properly implemented.
50. However, I note that the Commission does not seek any orders in respect of the Compliance Policy or that it be altered in any way. I conclude that the Commission is satisfied that the existing Compliance Policy is, as designed, satisfactory and that it will be properly implemented in the future, taking into account the matters in [52] below.

Whether the company has shown disposition to cooperate with the authorities responsible for the enforcement of the Act in relation to the contravention

51. Ticketek has cooperated with the Commission throughout the conduct of its investigation, which commenced in February 2010, and in the approach to resolution of the matters raised.
52. It is agreed that the investigation has had the close attention of the most senior officers of Ticketek and its parent, NEC, and that Ticketek has from an early stage put forward proposals to the Commission for an appropriate resolution of the investigation which have sought to address the Commission’s concerns, including proposing undertakings pursuant to s 87B of the Act.

Similar conduct in the past

53. Ticketek has not previously been found by any Court or tribunal to have contravened the Act in respect of conduct that is similar to that described in the Statement of Agreed Facts. Nor, to the best of senior management’s current knowledge, has Ticketek been found by any Court or tribunal to have contravened or been knowingly concerned in contraventions of any other provisions of the Act in its 30 year history.

Effect on the functioning of the market and other economic effects of the conduct

54. Due to the limited extent of the conduct, and the ongoing participation of Lasttix in the market since the time of the conduct, there has been no ongoing effect on the functioning of the market.
55. The limited impact on the functioning of the market is evidenced by recent entries into the market including:

(a) the launch of “FoxTix” in October 2010, a new national ticketing services venture owned by News Limited; and

(b) the launch of “TicketDesq” by International Management Group in March 2011, a new web-based platform that can be adopted for use by clients who wish to create their own branded ticketing website.

This is relied upon by the parties to be evidence of the ongoing dynamic and competitive nature of the Ticketing Related Services Market.

56. Further, at all times before, during and since the Relevant Period, existing service providers, including Ticketek have, and continue to, engage in vigorous competition for the awarding of exclusive Ticketing Services Agreements by Venue Operators and Promoters. The business of ticketing service providers has, and continues to, depend upon continually bidding for and winning contracts for venues in competition against both existing and potential competitors, as well as “self-ticketing” models.

Proposed penalty

57. In applying the principles set out above to the conduct of Ticketek and having regard to the factors and circumstances outlined above, the parties submit that the imposition of a total pecuniary penalty of approximately $2.5 million would be appropriate, based on the following specific penalties which the parties agree properly reflect the seriousness of each piece of conduct and the cooperation and contrition evidenced by Ticketek:

(a) $725,000 in respect of the AM Presents Refusal;

(b) $725,000 in respect of the Chugg Refusal;

(c) $725,000 in respect of the AKA Refusal; and

(d) $325,000 in respect of the KMP Removal, this being the “removal” that was temporary.

58. The parties note that the total proposed penalty of $2.5 million includes a reduction from the penalty which may otherwise be appropriate for the contravening conduct, as a reflection of the cooperation provided by Ticketek, as set out above. Such reduction is, in my view, appropriate.
59. The Commission’s position is that, in all the circumstances, the total penalty amount of $2.5 million is meaningful and substantial, serving the objects of general and specific deterrence and serving the public interest in encouraging the cooperation of parties the subject of Part IV investigation and litigation.

CONCLUSION

60. I am satisfied that the proposed penalty of $2.5 million is appropriate, as are the declarations and other orders sought by the parties.

I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Associate:

Dated: 22 December 2011

ANNEXURE A

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION NO NSD OF 2011

	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
	Applicant
	TICKETEK PTY LTD (ACN 010 129 110)
	Respondent

STATEMENT OF AGREED FACTS

CONTENTS

Page

INTRODUCTION

1. This Statement of Agreed Facts is provided in accordance with section 191 of the Evidence Act 1995 (Cth). The facts agreed to, and admissions made in this document, are agreed to have been made for the purpose of this proceeding only.
2. This Statement of Agreed Facts is in support of the request of the Applicant (ACCC) and the Respondent (Ticketek) that the Court make orders, by consent, as set out in the attached minutes (see Attachment 1).
3. This Statement of Agreed Facts concerns conduct which took place between 1 July 2009 and 19 January 2010 (Relevant Period) whereby Ticketek took advantage of its substantial degree of market power in the Ticketing Related Services Market in the Relevant Period for the substantial purpose of deterring or preventing Lasttix Pty Ltd (ACN 097 312 484) (Lasttix) from engaging in competitive conduct in that market, by:

(a) refusing, on three occasions, to implement in its Ticketing System discounted Price Types to be published by Lasttix when requested to implement those Price Types by Promoters or Venue Operators; and

(b) removing, on one occasion, from its Ticketing System, discounted Price Types that were published or to be published by Lasttix.

4. The ACCC is a body corporate established by section 6A of the Competition and Consumer Act 2010 (Cth), formerly named the Trade Practices Act 1974 (Cth) prior to 1 January 2011 (the Act), and is entitled to sue in its corporate name.
5. Ticketek is and was at all material times:

(a) a company incorporated pursuant to the Corporations Act 2001 (Cth);

(b) a trading corporation within the definition of ‘corporation’ in section 4 of the Act; and

(c) capable of being sued in its corporate name.

6. Unless otherwise stated, any reference to a particular state of affairs is a reference to the state of affairs as it existed during the Relevant Period.

BACKGROUND

Ticketek

7. Ticketek was established in 1979 and has approximately 200 full time employees.
8. During the Relevant Period, Ticketek carried on a business of providing end-to-end ticketing solutions to clients through the supply of Ticketing Related Services.
9. For the purposes of these proceedings, Ticketing Related Services are services inherent in, and incidental to, the function of selling and distributing tickets for live entertainment events. The range of services that comprise Ticketing Related Services can vary between suppliers of services and over time but for the purposes of these proceedings included some or all of the range of services set out below in paragraph 59.
10. Ticketek supplied Ticketing Related Services to a range of clients within Australia including venues, event promoters, theatrical producers and sports clubs across a broad range of live entertainment genres including sport, music, theatre, dance, family and lifestyle events.
11. During the Relevant Period, Ticketek typically supplied Ticketing Related Services to Venue Operators and/or Promoters under the terms of Ticketing Services Agreements. Ticketing Services Agreements were typically entered into with a Venue Operator for services provided in respect of a particular venue or, with a Promoter, for services provided in respect of a particular event.
12. For the purposes of this Statement of Agreed Facts:

(a) a person that owned or operated a venue at which events were hosted is a “Venue Operator” (Venue Operator);

(b) a person or organisation other than a Venue Operator, which was involved in the production or promotion of an event is a “Promoter” (Promoter); and

(c) an agreement between a person that provided Ticketing Related Services and a Venue Operator or Promoter is a “Ticketing Services Agreement” (Ticketing Services Agreement).

13. The majority of the Ticketing Services Agreements to which Ticketek was a party, during the Relevant Period from time to time granted Ticketek the exclusive rights to print, prepare, sell and distribute tickets at the particular venue or event which was the subject of the Agreement. The range of Ticketing Related Services provided under each Ticketing Services Agreement varied depending on the circumstances and complexity of each venue or event, and the requirements of each Venue Operator or Promoter.
14. Consideration for Ticketing Services Agreements typically involved the payment of key money and rebates of ticketing service charges to the Venue Operator or Promoter. For the purposes of this Statement of Agreed Facts, key money payments represented payments made to secure exclusive Ticketing Services Agreements with certain venues for a period of time, typically paid up-front or sometimes staggered over the term of the Ticketing Services Agreement (key money).
15. Ticketek earned the majority of its revenue in the provision of Ticketing Related Services from the sale of the tickets by way of ticketing fees levied on tickets sold and/or ticket sale transactions, including:

(a) “Inside charges and booking fees”, comprised within the face value of the ticket and payable per ticket;

(b) “Transaction fees”, levied on top of the ticket and payable by the consumer per ticket purchase transaction. The transaction fees may differ according to which distribution channel was used to purchase the ticket.

16. The type and quantum of such fees were typically specified in Ticketing Services Agreements and negotiated at the time these Ticketing Services Agreements were formed.
17. During the Relevant Period Ticketek held approximately 75 exclusive Ticketing Services Agreements with Venue Operators and Promoters around Australia. The term for an exclusive Ticketing Services Agreement for venues and events can vary significantly, but for venues during the Relevant Period, the vast majority of Ticketing Services Agreements held by Ticketek fell within the range of three to five years. Many significant venues and events across Australia were the subject of exclusive Ticketing Services Agreements held by Ticketek during the Relevant Period, including:

(a) sporting venues such as the Melbourne Cricket Ground, Sydney Cricket Ground and Suncorp Stadium (Brisbane);

(b) arena/concert venues such as Rod Laver Arena (Melbourne & Olympic Parks Trust), Allphones Arena (Sydney) and Brisbane Entertainment Centre;

(c) theatres such as Her Majesty’s Theatre (Melbourne) and Theatre Royal (Sydney); and

(d) events such as Formula 1 Grand Prix, Moto GP, Bathurst V8, Australian Tennis Open, NRL club fixtures such as Cronulla Sutherland Football Club, and the Red Bull Air Race.

18. Ticketek supplied many of the Ticketing Related Services under its Ticketing Services Agreements using a ticketing system designed, owned and developed by Ticketek called “Softix” (Ticketing System). The Ticketing System facilitates the technical aspects associated with the provision of Ticketing Related Services, including creating new events, sales across different distribution channels, ticket processing and dispatch, ticket scanning and reporting. The Ticketing System has been progressively developed, modified and enhanced by Ticketek’s development team over many years as a result of continued maintenance and investment by Ticketek.
19. During the Relevant Period, the Ticketing System allowed for the ticketing of events generally and in particular, for the setting up and modification of various Price Types for a particular event. Ticketek typically set up and modified Price Types for an event as requested by and at the pricing levels determined by a Venue Operator or Promoter.
20. For the purposes of this Statement of Agreed Facts:

(a) “Price Type” means a uniquely priced category of ticket to an event which may be implemented in the Ticketing System and in relation to which access by prospective ticket purchasers may be restricted by a Price Type URL or a Promo Code;

(b) “Price Type URL” means a unique URL associated with a Price Type which may restrict web-based access to the associated Price Type to those persons accessing the Price Type by means of the unique URL or may direct web-based access to the associated Price Type whether or not that Price Type could be accessed with or without the unique URL; and

(c) “Promo Code” includes a unique sequence of letters or numbers which may function as a password in relation to restricting access to a Price Type and may be communicated by a prospective ticket purchaser for the purpose of accessing a Price Type for an event;

(d) “URL” means Universal Resource Locator.

21. During the Relevant Period, Ticketek had the capability to provide all or almost all of the Ticketing Related Services set out below in paragraph 59.
22. By reason of the exclusive Ticketing Services Agreements which Ticketek held during the Relevant Period, Ticketek had the ability to prevent other service providers from providing particular Ticketing Related Services to Venue Operators and Promoters for events where Ticketek was the exclusive ticketing services provider. Ticketek’s ability to prevent other service providers from providing particular Ticketing Related Services for those events was at various times:

(a) a legal and commercial ability based on the terms of the Ticketing Services Agreement; and/or

(b) a technical ability based on Ticketek’s operational control of the Ticketing System.

Lasttix

23. A reference to Lasttix in this Statement of Agreed Facts is a reference to the company with ACN 097 312 484, incorporated in 2001, which has, at least, been registered under the names:

(a) Tickets Pty Ltd; and

(b) Lasttix Pty Ltd;

and which has, during the Relevant Period, at least, operated the businesses:

(c) trading under the business name ‘MyTickets’ and the domain name ‘MyTickets.com.au’ (MyTickets); and

(d) trading under the business name ‘Lasttix’ and the domain name ‘Lasttix.com.au’.

24. During the Relevant Period, Lasttix carried on the business of supplying, or offering to supply, Ticketing Related Services in Australia to promote the sale of tickets. Lasttix’s primary means of promoting the sale of tickets was through the provision of services to Promoters in relation to discount ticket offers for events through either the Lasttix or MyTickets businesses.
25. The Ticketing Related Services offered by Lasttix were services which promoted the sale of tickets by:

(a) publishing discount ticket offers on its website and/or in emails to its own database of potential ticket purchasers, or to other databases of potential ticket purchasers owned by other persons; and

(b) electronically re-directing consumers wishing to purchase a discount ticket to the relevant ticketing agent or other relevant entity.

26. Lasttix’s redirection of a consumer to the relevant entity that ultimately transacted the sale of the ticket for the event took place through either:

(a) in some cases, a form of website integration between the Lasttix website and the website of the relevant entity; or

(b) in other cases, such as Ticketek, a Price Type URL which created a non-searchable deep link to the website of the ticketing agent or other relevant entity which corresponds with the relevant Price Type for the discounted ticket offer. In these cases, Venue Operators or Promoters typically requested ticketing agents to provide them with a Price Type for Lasttix discounted ticket offers.

27. In consideration for the Ticketing Related Services which Lasttix supplied, Lasttix charged Promoters a success based commission fee, calculable by reference to the quantity and price of tickets which were sold as a result of Lasttix’s services.
28. During the Relevant Period, Lasttix only had the capability to provide the Ticketing Related Services which related to the promotion of ticket sales as set out below in paragraph 59(j).

THE RELEVANT CONDUCT

Refusals to implement price types conduct

‘Dr Phil’ Event - July 2009

29. In July 2009 Andrew McManus Presents Pty Ltd (AM Presents) was the Promoter of, among other things, an Australian tour of ‘Dr Phil’. In Melbourne, a performance of the event on 5 August 2009 was hosted at the Rod Laver Arena by the Venue Operator Melbourne and Olympic Parks Trust (MOPT) (‘Dr Phil’ Event).
30. Pursuant to an exclusive Ticketing Services Agreement between MOPT and Ticketek, certain Ticketing Related Services in respect of the ‘Dr Phil’ Event were supplied by Ticketek.
31. On 17 July 2009, AM Presents and MOPT requested Ticketek to implement in its Ticketing System a discounted Price Type for the ‘Dr Phil’ Event to be published exclusively by Lasttix (then trading under the name MyTickets). That same day, Ticketek refused to implement the requested Price Type in its Ticketing System.
32. By email dated 17 July 2009 Ticketek’s State Manager of Victoria reported this decision to Ticketek’s Client Sales and Service Director, stating:

“McManus have requested a discounted MyTickets price type for Dr. Phil. This price is cheaper than the current discounted tickets we are selling for this particular event.

I have asked ... to tell Dan (MOPT) that this will price type will not be added to this event.“

33. By the communications from Ticketek to MOPT referred to above, Ticketek refused AM Presents’ request to implement in its Ticketing System discounted Price Types to be published by Lasttix in connection with the ‘Dr Phil’ Event (AM Presents Refusal).

‘Liza Minelli’ and ‘World Dog Games’ Events – October 2009

34. In October 2009 Chugg Entertainment Pty Ltd (Chugg Entertainment) was the Promoter of, among other things, a production called ‘World Dog Games’ and a concert tour of the artist Liza Minelli, (together the ‘Liza Minelli’ and ‘World Dog Games’ Events).
35. The World Dog Games event was hosted at Acer Arena in Sydney, commencing on 30 October 2009. Pursuant to an exclusive Ticketing Services Agreement between the Venue Operator of Acer Arena and Ticketek, certain Ticketing Related Services in respect of the ‘World Dog Games’ Event were supplied by Ticketek.
36. Performances of the Liza Minelli tour were held at various venues around Australia commencing on 16 October 2009. Among the venues hosting the Liza Minelli performances during the tour were the Riverside Theatre in Perth, the Adelaide Entertainment Centre in Adelaide, Rod Laver Arena in Melbourne and the Brisbane Entertainment Centre in Brisbane. Each of the Venue Operators of these venues had exclusive Ticketing Services Agreements with Ticketek in operation in October 2009. Pursuant to these agreements, Ticketek supplied certain Ticketing Related Services in respect of the performances of the Liza Minelli tour at these venues.
37. On both 8 October 2009 and 9 October 2009, Chugg Entertainment requested Ticketek to implement in its Ticketing System discounted Price Types to be published by Lasttix in connection with the ‘Liza Minelli and ‘World Dog Games’ Events.
38. On or around 14 October 2009, Ticketek refused to implement in its Ticketing System the discount Price Types requested by Chugg Entertainment on 8 and 9 October 2009. Ticketek advised Chugg Entertainment that it would aim to assist Chugg Entertainment in promoting the events through Ticketek’s own marketing channels and proposed to Chugg Entertainment some means by which this could be achieved.
39. Later on 14 October 2009 and again on 17 October 2009, Chugg Entertainment again contacted Ticketek and queried why Ticketek had enabled Lasttix to publish discounted Price Types in relation to another event (known as ‘World’s Funniest Island’ or ‘WFI’) that was currently being ticketed by Ticketek.
40. On 17 October 2009, the Business Development Manager of Ticketek responded to Chugg Entertainment stating:

“The LastTix/WFI is unauthorised - they have used a price plan that is in place for a different program. We have asked WFI to take it down. To be clear we do not endorse and will not enable links for Last Tix.

I hope this helps clarify our position.”

41. By the communications and correspondence from Ticketek to Chugg Entertainment outlined above, Ticketek refused Chugg Entertainment’s request to implement in its Ticketing System discounted Price Types to be published by Lasttix in connection with the ‘Liza Minelli’ and ‘World Dog Games’ Events (Chugg Refusal).

‘The Trocks’ Event – October 2009

42. In October 2009 Andrew Kay & Associates Pty Ltd (AKA) was the Promoter of, among other things, a production called ‘Les Ballets Trockadero De Monte Carlo’, also known as ‘The Trocks’. In Sydney, performances of ‘The Trocks’ were staged at the Theatre Royal, commencing on 10 November 2009 (‘The Trocks’ Event).
43. Pursuant to an exclusive Ticketing Services Agreement between the Venue Operator of the Theatre Royal and Ticketek, certain Ticketing Related Services in respect of ‘The Trocks’ Event were supplied by Ticketek.
44. On 15 October 2009, AKA requested that the relevant Account Manager within Ticketek implement in Ticketek’s Ticketing System a discounted Price Type to be published by Lasttix in connection with ‘The Trocks’ Event. That same day, the relevant Account Manager within Ticketek responded to AKA, stating:

“Unfortunately we do not facilitate offers from Lasttix.com as they are considered by Ticketek as a competitor. Apologies for the inconvenience but we can't put together a special offer for this one.”

45. By email dated 15 October 2009, AKA communicated to Ticketek that it did not understand why Lasttix would be considered a competitor to Ticketek. By an email that same day, the relevant Account Manager within Ticketek responded to AKA that:

“Ticketek have no affiliation with Lasttix and are opposed to facilitating offers to their members by allowing them to piggyback off our transactional website, and in particular when those offers are more favourable than what has been made available to our own customers.

We believe that by facilitating the offer we would be providing LastTix with a perceived credibility as a location to receive special offers, and giving their customers and ours the illusion of partnership between our two websites, which would be wholly incorrect.”

46. By the correspondence between Ticketek and AKA outlined above, Ticketek refused AKA’s request to implement in its Ticketing System discounted Price Types that were to be published by Lasttix in connection with ‘The Trocks’ Event (AKA Refusal).

Removal of Price Types conduct

‘Warriors of Brazil’ Event – January 2010

47. In January 2010, Kay and McLean Productions Pty Ltd (KMP) was the Promoter of, among other things, a production called ‘Warriors of Brazil’ (the ‘Warriors of Brazil’ Event).
48. In Sydney, performances of the ‘Warriors of Brazil’ Event were staged at the Theatre Royal, commencing on 19 January 2010. Pursuant to an exclusive Ticketing Services Agreement between the Venue Operator of the Theatre Royal and Ticketek, certain Ticketing Related Services in respect of the ‘Warriors of Brazil’ Event for Sydney performances were provided by Ticketek.
49. In Melbourne, performances of the ‘Warriors of Brazil’ Event were staged at Her Majesty’s Theatre, commencing on 1 February 2010. Pursuant to an exclusive Ticketing Services Agreement between the Venue Operator of Her Majesty’s Theatre and Ticketek, certain Ticketing Related Services in respect of the ‘Warriors of Brazil’ Event for Melbourne performances were also provided by Ticketek.
50. Prior to 19 January 2010, KMP requested and Ticketek implemented in its Ticketing System a discount Price Type labelled “Twenty Offer” which facilitated access to tickets to each of the Sydney and Melbourne performances of the ‘Warriors of Brazil’ Event at a discounted price of twenty dollars per ticket. Ticketek prepared and issued Price Type URLs to KMP in respect of each of the discounted Price Types, respectively for Sydney and Melbourne, which had been implemented by Ticketek in the Ticketing System.
51. KMP provided these Price Type URLs to Lasttix, who then published information referring to a discounted ticket offer for the ‘Warriors of Brazil’ Event containing the Price Type URL which Ticketek had implemented.
52. On or around 19 January 2010, Ticketek became aware that Lasttix was publishing twenty dollar discounted ticket offers to the ‘Warriors of Brazil’ Event and was linking its website to the Price Type URL’s which Ticketek had implemented for KMP. Ticketek then disabled each of the Sydney and Melbourne Price Types, labelled as the “Twenty Offer”.
53. The relevant Account Manager within Ticketek advised KMP of this decision in an email dated 19 January 2010 at 11.49am, which stated, amongst other things:

“Unfortunately, Ticketek do not facilitate offers via Lasttix.com as they are considered a competitor.”

54. By telephone and by emails dated 19 January 2010 at 12.18pm, 12.27pm and 12.38pm, KMP contacted the relevant Account Manager at Ticketek and requested that Ticketek reinstate in its Ticketing System the ‘Twenty Offer’ discounted Price Type to be published by Lasttix.
55. By email dated 19 January 2010 at 1.07pm, the relevant Account Manager within Ticketek responded to KMP stating:

“Unfortunately we are unable to reinstate the price type as I have confirmed that lasttix is an exclusive ticketing service and not simply marketing tool, which we do not have affiliation with.

In our contract between Ticketek and Theatre Royal it clearly states that:

‘Ticketek shall act as the Theatre's exclusive Ticketing Services provider until the Termination Date,’

In this instance lasttix is considered as an exclusive ticketing service provider, which is a direct conflict of interest to us.

The only way we could work around this issue is to have an allocation set aside for lasttix to sell on their own website, however this would involve an extra resellers fee, such as we have with Showbiz and Pinpoint.”

56. By the conduct referred to above, Ticketek removed from its Ticketing System the discounted Price Types that were published or were to be published by Lasttix in connection with the ‘Warrior of Brazil’ Event (KMP Removal).
57. Further discussions between Ticketek senior management, KMP and the Theatre Royal took place on or around 2.00pm, 19 January 2010. By email dated 19 January 2010, at 2.33pm, the State Manager of NSW within Ticketek wrote to KMP and Theatre Royal, proposing that the discounted Price Type be reinstated on certain conditions, including that Ticketek receive a fee of $1.75 per ticket sold, that the reinstated discounted Price Type set no precedent in respect of future hirers of the venue, and that Theatre Royal advise future hirers that offers cannot be facilitated by Ticketek for the Lasttix website. KMP and the Theatre Royal agreed to the conditions proposed by Ticketek.
58. By email dated 19 January 2010, at 2.53pm, Ticketek confirmed that the discounted Price Type would be reinstated on the basis of the conditions agreed. Ticketek then reinstated the ‘Twenty Offer’ Price Type in its Ticketing System.

THE TICKETING RELATED SERVICES MARKET

Ticketing Related Services

59. For the purposes of these proceedings, “Ticketing Related Services” means some or all of the following services provided in relation to live entertainment events:

(a) the preparation of tickets for sale (including procuring ticket stock, collating event information and allocation and implementation of Price Types);

(b) the printing of tickets (or making it possible for customers to print their own tickets online);

(c) the selling of tickets (usually done through various distribution channels including retail agencies, box offices at venues, call centres and online);

(d) the physical distribution of tickets to purchasers (making tickets available for collection at a box office or distribution by mail);

(e) the collecting of monies for tickets from customers;

(f) the settling of net proceeds with Venue Operators and Promoters;

(g) the provision of up-to-date ticketing sales information, including tracking the level of ticketing sales;

(h) the provision of post-event information about ticketing sales and demographics of customers;

(i) the provision of speciality services to facilitate the sale of tickets through various channels, including, but not limited to:

1. the supply of premium ticketing services including premium seating, corporate hospitality and premium pre-sales;
2. bundled ticketing services offering a single ticket including on-site car-parking, event entry and a pre-ordered food and beverage package;
3. the supply of travel and accommodation ticket packages in conjunction with affiliated organisations; and
4. the supply of discount ticket offerings; and

(j) the provision of services to promote the sale of tickets, including, but not limited to publishing the details and prices of events through various channels, including:

1. internet advertising (including via various websites, search word advertising and promotion);
2. email marketing (including weekly and monthly e-newsletters to various consumer databases, as well as specific email campaigns directed at various membership groups);
3. social network advertising (including Facebook posts and twitter tweets);
4. sms campaigns;
5. television commercials and magazine advertising; and
6. direct mail campaigns,

(together Ticketing Related Services).

60. During the Relevant Period there existed a substantial demand from Venue Operators or Promoters for the supply of Ticketing Related Services as a means of commercialising attendance at events.
61. Depending on the size of the event being ticketed, the complexity of the sales process required, and other factors, the nature and extent of the Ticketing Related Services demanded by, and supplied to, Venue Operators and Promoters varied significantly for particular venues or events.
62. During the Relevant Period there was a broad spectrum of service providers involved in the provision of Ticketing Related Services. Variation amongst these service providers existed and was based on:

(a) the sophistication of the service provider’s ticketing system and the robustness of their technology;

(b) the service provider’s ticket distribution capability;

(c) the commercial ability of the service provider to pay key money, rebates or other financial incentives often demanded by Venue Operators; and

(d) the extent to which the service provider had the capability and scale to provide all (a full service offering) or only some (a partial service offering) of the Ticketing Related Services listed in paragraph 59.

63. During the Relevant Period, particular venues which had the ability to “self-ticket” and “self-promote”, such as the Sydney Opera House and Victorian Arts Centre, also competed for the provision of Ticketing Related Services, and had the capability to provide either a full or partial service offering depending on the circumstances of the particular venue.
64. During the Relevant Period service providers with the capability and scale to provide a full service offering across Australia included Ticketek and Ticketmaster Australasia Pty Ltd. There were a range of other service providers who provided full service offerings in some Australian States, or who provided partial service offerings.
65. Based on the facts and matters set out above in relation to the relevant conduct and market characteristics, the ACCC and Ticketek agree that during the Relevant Period, an Australia wide market for the sale and acquisition of Ticketing Related Services existed (the Ticketing Related Services Market).

MARKET POWER

Market share

66. During the Relevant Period, there were various ways in which market shares for the Ticketing Related Services Market could be calculated, including by calculating either the total value of tickets sold or the total number of tickets sold as a consequence of the services provided by each participant.
67. Notwithstanding the particular method of calculation, during the Relevant Period Ticketek agrees that it held a large share of the Ticketing Related Services Market.
68. During the Relevant Period, the approximate market share of Ticketek, calculated by the number of total tickets sold by Ticketek as a percentage of the total number of all tickets sold for live entertainment events across Australia, is estimated to have been approximately 45%.

Barriers to Entry and Expansion

69. During the Relevant Period, there were relatively low barriers to entry to a new entrant establishing a Ticketing Related Services business to supply a partial service offering to Venue Operators and Promoters.
70. However, there were barriers to potential or existing suppliers of Ticketing Related Services entering or expanding into a business capable of providing a full service offering to Venue Operators and Promoters. These barriers were primarily by reason of the fact that during the Relevant Period the provision of a full service offering of Ticketing Related Services required a service provider to have sufficient capability and scale to deliver all the required services, including:

(a) a sophisticated ticketing system and robust technology;

(b) investment in building and maintaining a wide reaching ticket distribution capability;

(c) payment of significant key money, rebates and other financial incentives often demanded by Venue Operators in connection with agreeing to exclusive Ticketing Services Agreements.

Constraints provided by actual or potential competitors

71. During the Relevant Period Ticketek and Ticketmaster competed in relation to the provision of an Australia wide full service offering across all Ticketing Related Services. During that Relevant Period, very few other existing or potential service providers had the capability or scale to effectively compete with Ticketek or Ticketmaster for the provision of such offerings. This limitation on competitive constraint particularly affected Venue Operators at significant, high capacity venues, such as the venues concerned in respect of the Events.
72. By reason of these facts, overall Ticketek was not constrained to a substantial degree by competitors or potential competitors in the Ticketing Related Services Market in respect of full service offerings during the Relevant Period.

Conclusion as to market power in the Ticketing Related Services Market

73. Based on the facts set out above, the ACCC and Ticketek agree that during the Relevant Period Ticketek had a substantial degree of market power in the Ticketing Related Services Market by reason of at least the following matters:

(a) it held a large share of the Ticketing Related Services Market, including a large number of the available Ticketing Services Agreements;

(b) it was not constrained to a substantial degree, by the conduct of competitors or potential competitors in the Ticketing Related Services Market in respect of full service offerings; and

(c) there were certain barriers to new or existing firms entering or expanding into a business that provided a full service offering in the Ticketing Related Services Market.

74. There have been continuing significant developments in the Ticketing Related Services Market both during and subsequent to the Relevant Period, including:

(a) the increased development of technology based ticketing solutions as an alternative to service providers providing a full service offering;

(b) the increasing capability and preference of some significant venues to consider “self-ticketing” as an alternative; and

(c) the entry or potential entry of new suppliers into the Ticketing Related Services Market.

75. Accordingly, Ticketek’s admission that it had a substantial degree of market power in the Ticketing Related Services Market is confined to the Relevant Period.

TAKE ADVANTAGE

76. Based on the facts and matters set out above, the ACCC and Ticketek agree that during the Relevant Period, Ticketek held a substantial degree of market power in respect of the Ticketing Related Services Market and that its conduct in refusing to implement, or by removing, discounted Price Types requested by Venue Operators and Promoters as described in paragraphs 29 to 58 above, was materially facilitated by that market power.

PURPOSE

77. Based on the facts and matters set out above, Ticketek’s conduct in respect of each of these events was for the purpose of deterring or preventing Lasttix from supplying certain Ticketing Related Services in the Ticketing Related Services Market.

ADMISSIONS AND CONTENTIONS FOR THE PURPOSES OF THESE PROCEEDINGS

78. By reason of the foregoing, and for the purpose of these proceedings only, Ticketek admits that during the Relevant Period it took advantage of its substantial degree of market power in the Ticketing Related Services Market by:

(a) refusing on three occasions to implement in its Ticketing System discounted Price Types to be published by Lasttix when requested, being the AM Presents Refusal, the Chugg Refusal and the AKA Refusal; and

(b) by removing from its Ticketing System, in one instance, for a period of several hours, discounted Price Types that were published or to be published by Lasttix, being the KMP Removal,

and that it did so for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct in the Ticketing Related Services Market.

CONTRAVENTIONS

Refusals to implement Price Types

79. Ticketek admits, for the purpose of these proceedings only, that by engaging in conduct constituted by:

(a) the AM Presents Refusal;

(b) the Chugg Refusal; and

(c) the AKA Refusal,

in each case it took advantage of its substantial degree of market power in the relevant market for the substantial purpose of deterring or preventing Lasttix from engaging in competitive conduct and thereby contravened section 46(1) of the Act and engaged in conduct of the kind referred to in section 76(1)(a) of the Act on three separate occasions.

Removal of Price Types conduct

80. Ticketek admits, for the purpose of these proceedings only, that by engaging in the conduct constituted by the KMP Removal, it took advantage of its substantial degree of market power in the relevant market for the purpose of deterring or preventing Lasttix from engaging in competitive conduct and thereby contravened section 46(1) of the Act and engaged in conduct of the kind referred to in section 76(1)(a) of the Act.
    

Signed:

.................................... .....................................

Rani Sara John Richard Flitcroft
Lawyer for the Respondent Lawyer for the Applicant

Date: December 2011