Market-abuse fine of 10 million euros imposed on CTS Eventim-TicketOne annulled in ground-breaking appeal judgment contesting interlinks between Article 102 TFEU and EU merger rules

In its decision (which we had previously commented on here), the AGCM found that CTS Eventim, through its subsidiary Ticket One, (the leading event ticket seller for live music in Italy) had implemented a complex exclusive strategy with the double aim of boycotting competing ticket sellers and imposing exclusivity agreements on event promoters in the Italian market for ticket sellers for live pop music events. 

According to the AGCM, the alleged complex exclusive strategy was carried out as follows:

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

In the view of the AGCM, the effect of the exclusionary strategy was to prevent competing ticketing operators from selling, in any capacity and through any channel, a significant proportion of tickets for live pop and rock music events, and to prevent potential new ticket operators from entering the market. 

The Tar Lazio, in front of which an appeal against the AGCM decision had been brought by Ticket One, has overridden the AGCM decision. 

In the appeal ruling, the Italian administrative judges concluded that the AGCM wrongly considered that the last of the five contested behaviours (the acquisition of four rival event promoters) was an essential element for establishing the abuse of a dominance position in the relevant market under Article 102 TFEU. 

According to the TAR Lazio, the allegation against the Eventim - TicketOne group, that the acquisitions were “explicitly aimed at foreclosing the relevant market to competing ticketing operators” was not supported by adequate fact-finding by the AGCM. The latter, as stated in the TAR ruling, has not considered Ticket One’s defensive pleadings to demonstrate that the purpose of the acquisitions was to confront a main competitor (Live Nation/Ticketmaster) through the entry of the Eventim - TicketOne group in the promoting sector.

The TAR Lazio also upheld Ticket One’s appeal which concerned the difficulty involved in challenging a concentration in terms of an abuse of a dominant position under Article 102 TFEU.

The AGCM noted in this regard that the merger carried out by the Eventim-TicketOne group did not in itself constitute an abuse of a dominant position, rather it was considered to be part of a more complex exclusionary strategy. 

However, the TAR Lazio claimed that such a conclusion is not compatible with the EU merger regulatory framework, specifically within Article 21(1) of Regulation (EC) No 139/2004 (the “EU merger Regulation”) which expressly excludes the applicability of Articles 101 and 102 TFEU to merger operations. 

Therefore, making the distinction between Articles 101 and 102 TFEU and the merger rules as its main starting point, the TAR Lazio concluded that the antitrust authorities are not allowed to set aside the use of the control mechanism provided for in the EU merger Regulation and to intervene in the case through the application of Article 102 TFEU instead. Such an approach, in the TAR Lazio opinion, amounts to “an artificial non-application of the EU rules governing mergers, the purpose of which is already to intervene in transactions which, having regard to the particular conditions of the relevant market, are deemed capable of hindering its development”. 

According to the TAR Lazio ruling, a different decision (i.e., giving the possibility to antitrust authorities to analyse merger operations outside of the relevant EU merger regulation) would undermine the control system set out by the merger regulatory framework and ultimately violate the principles of legal certainty and of freedom of economic initiative. 

As such, the TAR Lazio ruling presents ground-breaking considerations not only on the interactions between the EU merger regulation and the Treaty provisions on anti-competitive agreements and abuses of dominant positions, but more specifically on how merger operations under Article 102 TFEU o should be assessed when such acquisitions are concretely part of a wider abusive strategy of an exclusionary nature. 

Also of importance is the fact that the contested acquisitions did not meet the economic thresholds set forth by the EU and Italian merger control rules and, as such, they were not previously notified to the antitrust watchdogs. 

Accordingly, the ramifications that may follow the judgement at first instance could be broader if the current judgment is interpreted as precluding a “standard” approach to antitrust regulation regarding conduct that is not reportable under the merger control rules. The judgment may be appealed before the supreme administrative judge which would solve the issue of uncertainty.    

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