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MCC’s ticketing policy is not in violation of fair competition

Mr Justice Mark Chetcuti ruled that the Mediterranean Conference Centre Management Committee’s policy that all productions hosted at the Mediterranean Conference Centre are to use its ticketing systems does not violate Articles 5 and 9 of the Competition Act (Chapter 379).

4 February 2014, 12:00am
Mr Justice Chetcuti was presiding over the Appeals Tribunal - established under the Malta Competition and Consumer Affairs Authority Act - following an appeal instituted by Miqna Systems Limited and Malta Limited from a decision given by the Office of Fair Competition.

The Appeals decision was delivered on 29 January 2014 in the names Miqna Systems Limited and Malta Limited -v- Competition Office, following a complaint by Miqna Systems Ltd. 

Filed on 2 January 2007, this complaint referred to the Mediterranean Conference Centre Management Committee (MCCMC)'s policy that all organisers of performances held at the Mediterranean Conference Centre (MCC) were bound to use their ticketing system. 

The policy also stated that tickets were to be sold exclusively from their box office and ticketing system and under the control of MCC, while organisers were prohibited from selling their own performance tickets; unless they would have purchased the tickets themselves and paid for them beforehand. 

The complainants held that this policy went contrary to the Competition Act, since this was a decision take by an association of undertakings composed of MCC, Manoel Theatre and the government, with the sole of aim of restricting and distorting competition.  The companies argued further that this policy was an abuse of MCC's dominant position in the market.

MCC's management denied charge that its relationship with the Manoel Theatre and the government is intended to distort competition and also insisted that the relationship is a legitimate one. They further argued that the rental of theatres and the sale of tickets are two separate markets. Similar policies are adopted elsewhere. According to MCC the complainant companies had access to other theatres, venues, concert halls, museums and sports facilities.

The Office of Competition dismissed the complaint on the grounds that the event organisers did not participate in the MCC's policy to distort competition. The policy applied to all organisers who made use of the MCC. 

It also stated that MCC is not an association of undertakings, since the European Court and Commission interpret an undertaking to be for example co-operatives - associations of commercial groups that represent the same economic activity. 

The MCCMC did not act on behalf of others, apart from the government. As regard to the charge that MCC held a dominant position within the market, the Office for Competition held that it was true that it was dominant for those theatres that had over 1000 seating. 

There was no evidence that MCCMC was responsible for the practice of "tying", which meant that organisers who choose MMC are forced to buy another product, in this case the sale of tickets. The Office held that the renting of theatres and the sale of tickets are two separate activities and this policy is only limited to when MCC is rented out. MCCMC did not compete in the sale of tickets market and limited itself to performances at the MCC.

The Appeal Tribunal held examined if the MCCMC had established an agreement between undertakings or a decision by an association of undertakings or a concerted practice between undertakings. The complainant held that this was the case for MCC and Manoel Theatre, since there was a common chairman, both operated from Valletta and the government was the shareholder. 

Mr Justice Chetcuti disagreed, since this did not show a group of understandings with the same aim of promoting the commercial interest of its members. The members of the MCCMC sought to promote the interest of MCC and not the other way round. 

The second ground of appeal dealt with whether the MCCMC was abusing from its dominant position and thus limiting the ticketing market to the consumers' detriment. The MCC explained that at the time whether the complaint was lodged the public visited the MCC ticket office to purchase tickets. This guaranteed that there were no double books, as had happened in the past. They also had email bookings which served the same purpose. There was no evidence that this service was not catering for the public's demand and the system seemed to be satisfactory. 

The Appeal Tribunal concluded by turning down the appeal and upholding the Office's decision.

Malcolm Mifsud is a partner at Mifsud & Mifsud Advocates

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