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CTS fights watchdog over ‘coercion claim

GERMANY -
World News
December 1, 2017
Andreas Mundt

Competition watchdog Bundeskartellamt has taken action against ticketing giant CTS Eventim over what it sees as the company abusing its dominant position by “concluding exclusive contracts with tour operators and advance booking offices”.

The regulator has banned CTS from requiring partners to only sell tickets exclusively or to a “considerable extent” through CTS, claiming this impedes smaller operators and is resulting in a monopolisation.

“CTS Eventim is the market leader in Germany and has by far the largest ticket system,” says Bundeskartellamt president Andreas Mundt.

“The company uses its market power to the detriment of the competition. Our decision will open significant ticket contingents for distribution through competing ticket systems.”

Bundeskartellamt has ruled that CTS partners must have the option of selling at least 20 per cent of their annual inventory through other ticket agencies.

However CTS, which has been given four months to comply, is refusing to accept the decision and claims the watchdog has failed to recognise the fierce competition in the market and frequent entry of new digital companies from Germany and elsewhere.

“We have to assume that the cartel office has gone into this procedure with a preconceived notion that does not adequately reflect this development,” says CTS in a statement. “All the investigations in the three-year proceedings were apparently aimed at confirming this belief.

“We will not accept the decision and will engage the courts to correct it”

CTS statement

“We regret that the agency has not adequately considered our strong counter-arguments, especially as they are supported by current studies and economic expert reports.

“For these reasons we will not accept the decision and will engage the courts to correct it.”

In a further blow to CTS, the Bundeskartellamt has also blocked its acquisition of Berlin-based booking agency and promoter Four Artists. It says allowing CTS to take a majority stake in Four (see Audience issue 207), which promotes more than 2,000 shows annually and represents 300 artistes including David Guetta, The Lumineers and Jimmy Eat World for Germany, would create unfair market conditions.

Klaus-Peter-Schulenberg

A spokesman for CTS, which owns  majority stakes in promoters FKP Scorpio and Peter Rieger Konzertagentur, says it is likely to appeal the decision.

Meanwhile, in its latest financial results, CTS saw revenue grow almost 30 per cent in the third quarter (Q3), from €576.2 million ($679.7m) in 2016 to €745.6m ($879.4m) this year. Earnings of €120.3m ($141.8m) were recorded before interest, tax, depreciation and amortisation (EBITDA), compared to €107.7m ($127m) last year during the same period.

Its ticketing division posted growth of 10.7 per cent to €265.9m ($313.6m), with EBITDA up from €82.3m ($97m) to €98.4m ($116m).

“The trend in recent months has shown that we are making excellent progress in implementing our growth strategy and making CTS more digital and international,” says CEO Klaus-Peter Schulenberg. “We expect higher revenues and stronger earnings for the year as a whole.”

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