Antitrust Bites - Newsletter

ICA fines TicketOne for abuse of a dominant position

With a decision published on 19 January, the Italian Competition Authority (ICA) closed the A523 investigation, imposing a fine of over EUR10 million on the CTS Eventim-TicketOne group for abuse of a dominant position in the market for the sale of tickets for live music events.

According to the ICA, the CTS Eventim-TicketOne group has put in place a unique and complex exclusionary strategy aimed at foreclosing access to the market for the sale of tickets for live music events to current, potential and new entrant ticketing operators.

This strategy, as stated in the ICA’s decision, is alleged to have consisted of a series of conducts implemented since at least 2013 and which are still ongoing, involving (i) the conclusion of exclusive contracts with promoters of live music events; (ii) the acquisition of multiple undertakings promoting live music events (iii) the imposition of exclusivity on local promoters; (iv) the conclusion of commercial agreements with smaller or local ticketing operators; and (v) a series of boycott and retaliatory actions against undertakings active in the provision of ticketing services for live music events.

In addition to the payment of the fine, the ICA ordered the CTS Eventim-TicketOne group to allow competing ticketing operators “on fair, reasonable and non-discriminatory terms, to sell by any means and through any channel, at least 20% of the total number of tickets for events produced or distributed by promoters or by ticketing operators tied exclusively to the Eventim-TicketOne group”.

An overview of fines imposed by the Italian Competition Authority in 2020

During 2020, the Italian Competition Authority (ICA) imposed fines of over EUR371 million for antitrust infringements. Three investigations were concluded finding evidence of anticompetitive agreements, with fines issued for a total amount of EUR228 million. Two investigations were concluded finding violation of the prohibition of abuse of a dominant position, with fines issued for a total amount of EUR143 million.

As regards consumer protection, 64 proceedings conducted by the Authority led to the detection of violations of consumer regulations, of which 36 cases were for unfair practices; 4 were for consumer rights; 3 were for joint application of the two disciplines; 8 were for failure to comply with previous decisions of the Authority; 11 were for unfair terms, and 2 for the violation of art. 9 of the EU Regulation n. 260/2012 concerning the payment accessibility. The ICA imposed fines of about EUR60 million, of which approximately EUR55 million was for unfair commercial practices and violation of consumer rights and EUR5 million was for non-compliance with precedent decisions and violation of art. 9 of the EU Regulation n. 260/2012.

Antitrust fines: ICA’s response to the crisis

In light of the serious crisis affecting the Italian economy, during the meeting held on 15 December 2020, the ICA approved:

1. the extension to 30 April 2021, following a party’s request, of the terms for the payment of antitrust fines, provided that only the legal interest is paid; and
2. the possibility for undertakings which have been granted the payment in instalments for antitrust and consumer protection fines to obtain, following a party’s request, the suspension of the instalment plan for four months, without prejudice to the payment of the legal interest accrued on the capital of the suspended instalments when the payment of the instalments is resumed.

The Authority’s decision is available here.

ICA opens a preliminary investigation into the legal separation project of the incumbent operator’s fixed access network

On 15 December 2020, the Italian Competition Authority (ICA) opened an investigation into the contracts relating to the FiberCop project.

In the context of the project for the legal separation of the incumbent operator’s fixed access network, FiberCop is the company into which the incumbent operator’s secondary network and the fiber network developed by Flash Fiber S.r.l., the joint venture in which the incumbent operator and Fastweb participate, will be transferred. FiberCop – which will be 58% owned by the incumbent operator, 27.5% by the KKR Fund and 4.5% by Fastweb – will offer wholesale passive access services to the secondary copper and fiber network.

The subject of the investigation opened by the ICA is represented by a series of agreements concerning wholesale broadband and ultrabroadband access services between the parties involved in the FiberCop project, the objective of which – according to the incumbent operator – is to boost investment in the modernisation of the fixed telecommunications network to facilitate the transition to high-capacity fiber networks.

As stated in the decision opening the preliminary investigation, the purpose of the procedure is to examine “certain critical elements” of the aforementioned agreements, which “appear to have an effect contrary to the objectives of development and co-investment, resulting in the reduction of infrastructure competition”, an important driver of fiber investments.

In particular, in the decision opening the investigation, the ICA identifies the following competitive risks: (i) the possible reduction of the competitiveness of the demand in the wholesale market; (ii) the possible reduction of the incentives to invest in fiber infrastructures; (iii) the possible reduction of the incentives to compete in the market of wholesale access services to fixed broadband and ultrabroadband network; (iv) the possible reduction of competition in the market of retail telecommunications services on fixed broadband and ultrabroadband network.

In brief, the ICA considers that certain clauses of the contracts under review are likely to reduce competition in the markets for wholesale and retail broadband and ultrabroadband telecommunications services, “by discouraging investment-based competition and increasing barriers to entry for certain types of operators, such as operators presenting commercial offers converging between broadband and ultrabroadband services and audio-visual media services”.

The ICA’s decision opening the investigation is available here.

German Competition Authority clears the setting-up of a joint venture for the management of a digital healthcare platform

The German Competition Authority (Federal Cartel Office (FCO)) has cleared the setting up of a joint venture aimed at managing a digital healthcare platform for the purchase and ordering of both prescription and over-the-counter medicines and other additional functions.

The FCO held that the transaction does not raise competitive concerns on the basis of the following considerations: on one hand, the emergence of competing digital platforms represents a growing phenomenon and determines advantageous effects in terms of higher innovation in the pharmaceutical sector; on the other hand, pharmacists running physical retail outlets will have simultaneous access to several platforms, thus benefiting from the opportunity to switch between them.

In the FCO’s view, however, it is not possible at the moment to deliver an overall assessment of the competitive dynamics related to pharmacy and healthcare platforms, as this market is still under development.