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On 23 May 2017, the Swiss Competition Commission released a public statement about its prohibition of the merger between Ticketcorner and Starticket.
Although the substantive test of the Swiss merger control regulation sets very high standards for an intervention the Swiss competition authority considered that the proposed merger between the two ticketing companies Starticket and Ticketcorner could lead to an elimination of effective competition on the Swiss ticketing markets. Therefore, the authority has prohibited the concentration.
On 23 May 2017, the Swiss Competition Commission (COMCO) released a public statement about its prohibition of the merger between Ticketcorner and Starticket.
Starticket and Ticketcorner are the country’s two biggest ticketing companies. Ticketcorner is jointly owned by CTS Eventim and the Ringier media group. Starticket belongs to the Tamedia group, which is like Ringier one of Switzerland’s largest media companies. If the merger were cleared, Starticket would have become wholly owned by Ticketcorner.
Ticketcorner and Starticket distribute tickets for concerts and shows, through physical and online channels (primary ticketing) and advertise on media channels and social network platforms. They also provide software solutions for the direct sale of tickets (ticketing software).
Considerations of the Swiss Competition Commission
COMCO reasoned that Ticketcorner may already have a dominant position on the market of the distribution of tickets by third parties and that the merger would have strengthened this dominant position.
The combined entity would have controlled the national market for primary ticketing and eliminated effective competition.
COMCO stated that the actual and potential competitors such as Spotify, Google and Facebook could not have exerted sufficient competitive pressure on the new entity and there were no suitable obligations or conditions that could be imposed to safeguard effective competition.
This is only the second merger COMCO has prohibited since the merger control regulation was introduced into Swiss law in 1996.
In Switzerland the substantive test of the merger control regulation sets very high hurdles for an intervention. The authority has to demonstrate that a concentration could create or strengthen a dominant position which could lead to the elimination of effective competition.
There is much debate about changing the law. In June 2016 the Federal Council decided to take steps towards a modernisation of the merger control regulation. The government is of the opinion that the negative and positive effects of a merger are given too little consideration. Therefore it has proposed to introduce the SIEC (Significant Impediment to Effective Competition) –the test of the European Union.
This merger, however, actually shows that even under the current law an intervention is possible. Nevertheless, it will be interesting to read more about COMCO’s competitive assessment when the full decision will be published. The authority has differentiated between third party distribution of tickets and own distribution. The dominant position was identified on the third party distribution market. However, event organisers can switch to own distribution if the prices and conditions of companies like Ticketcorner are not attractive enough. Therefore, it will be interesting to see how the authority has explained why the possibility of own distribution did not lead to competitive pressure on the ticketing companies?
The decision has not been published yet and may be appealed to the FAC.
Authors: Daniel Emch and Stefanie Schuler, Kellerhals Carrard.
This blog post was first published on Thomson Reuters‘ Practical Law website. It is reproduced from Practical Law with the permission of the publishers. For further information visit http://www.practicallaw.com or call +44 (0)20 7542 6664.