The Federal Administrative Court annulled the decision of the Swiss Competition Commission (COMCO) to close the investigation in the case Ticketcorner/Hallenstadion and handed the matter down for re-assessment. With its judgement, the Federal Administrative Court commits itself to effective judicial control. In doing so, not only evident horizontal and vertical agreements are under competition law scrutiny but all entrepreneurial forms of cooperation with possible impacts on competition. It also tends to narrow market definitions.
Decision B-3618/2013 of the Federal Administrative Court of 24 November 2016 – Ticket Sales for Events in the Hallenstadion Zurich.
The present case arises out of claims back in 2009. Competitors of the ticket service provider Ticketcorner AG (Ticketcorner) had complained to the COMCO about anti-competitive conduct in connection with the rental of the Zurich Hallenstadion.
Complaints have been lodged in particular in connection with the agreement between Ticketcorner and the location operator Aktiengesellschaft Hallenstadion (AGH) to cooperate in the field of ticket distribution (Ticketing Cooperation Agreement). On the basis of the Ticketing Cooperation Agreement, AGH had to impose on organisers of public events in the Hallenstadion the obligation in the rental terms to sell at least 50% of the tickets via Ticketcorner (Ticketing Clause); in practice, economic considerations de facto led to 100%.
Against this background, Ticketcorner-competitors felt illegally foreclosed from the market. The COMCO, however, found that there were no grounds for action against the denounced conduct and closed its investigation with decision of 14 November 2011 (RPW 2012/1, p. 74 ff. – Ticket Sales for Events in the Hallenstadion Zurich).
Several competitors appealed the COMCO decision to close the investigation. In a landmark judgment of 5 June 2013, the Federal Supreme Court ultimately confirmed the right of appeal of the two competitors Starticket AG and ticketportal AG and referred the case back to the Federal Administrative Court (BGE 139 II 328).
The Federal Administrative Court upheld the complaints of Starticket and ticketportal now, about three and a half years later, also on the merits. The COMCO wrongfully closed the investigation, in particular because of the following considerations.
- Illegal anti-competitive agreement: the interplay of the Ticketing Cooperation Agreement and the Ticketing Clause led to the obligation of organisers of public events in the Hallenstadion to contract with Ticketcorner, as imposed by AGH. According to the Federal Administrative Court, this obligation to contract fundamentally and seriously restricted the freedom of choice for event organisers as, in principle, independent purchasers of ticketing services.The Federal Administrative Court found the Ticketing Cooperation Agreement to constitute a so-called “other agreement”, since Ticketcorner and AGH are neither competitors (horizontal agreement) nor part of a vertical sales chain for the continuing distribution of goods (vertical agreement). According to the Federal Administrative Court, all entrepreneurial forms of cooperation with possible impacts on competition are covered by the purpose of the definition of anti-competitive agreements (Article 4 para. 1 Cartel Act). Hence, also ‘conglomerate’ anti-competitive agreements are caught.The Federal Administrative Court did not hear the COMCO’s argument of comparative equality of the Ticketing Cooperation Agreement with exclusive purchase and non-compete undertakings between distribution partners or sole and exclusive supply obligations of suppliers respectively. According to the Federal Administrative Court – considering also the Federal Supreme Court’s oral debate in the Gaba case (see judgment 2C_180 / 2014 of the Federal Supreme Court of 28 June 2016 – Gaba; reasoning not yet published) – the Ticketing Cooperation Agreement qualifies as an object restriction of competition that is qualitatively and quantitatively significant, unjustified and therefore illegal in the sense of Article 5 (1) Cartel Act.
- Abuse of market power: as a result of the underlying evidence and information in the case at hand, the Federal Administrative Court also found sufficient grounds to assume abusive conduct by market dominant undertakings.According to the Federal Administrative Court, AGH is dominant on the market for event locations in the German-speaking part of Switzerland with regard to individual mega-stage-shows and has abused this position by the use of the Ticketing Clause in the sense of both illegal tying (Article 7 (2) lit. f. Cartel Act) and illegal enforcing of inadequate terms and conditions (Article 7 (2) lit. c. Cartel Act).In the view of the Federal Administrative Court, also Ticketcorner holds a dominant position on both the market for ticketing in Switzerland and the ticketing business for individual mega-stage-shows in the German-speaking part of Switzerland. Ticketcorner abused its dominant position by indirectly imposing the event organisers’ obligation to contract. According to the Federal Administrative Court, this conduct is caught by the blanket clause of Article 7 (1) Cartel Act in the form of an ‘illegal enforcement of contractual obligations against business partners’.
The Federal Administrative Court’s annulment decision constitutes an interim decision. As a consequence, an appeal before the Federal Supreme Court is only possible if it causes irreparable prejudice to the appellant. The judgement has not yet become final.
If no appeal is filed, it is on the COMCO to re-assess the case in due consideration of the Federal Administrative Court’s findings and the ordered clarification of facts. Finally, the COMCO also has to determine whether and to what extent to impose fines.
In practice, the civil law remedies offered by the Cartel Act often have limited success. Potential claimants are reluctant to initiate civil claims against cartelists for various reasons. The proceeding in the case at hand, however, illustrates that initiating and vigorously pursuing the administrative path can be successful and is worthwhile considering, even though this proceeding already lasts for more than six years now and the end is not yet in sight.