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MERGER BETWEEN PILETILEVI GROUP AND TIKETA RESTRICTED COMPETITION

14 06 2022
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Today the Lithuanian competition authority Konkurencijos taryba has refused to clear the merger whereby the Estonian company Piletilevi Group acquired 100 per cent of the shares and sole control of the Lithuanian ticket distributor Tiketa. The authority found that the merger created or strengthened a dominant position or substantially restricted competition in the market for the distribution of tickets to various events in Lithuania.

On 9 July 2021 Piletilevi Group acquired 100 per cent of the shares and sole control of Tiketa. Since the income of Tiketa in 2020 did not exceed EUR 2 million, there was no obligation for Piletilevi Group to notify the intended merger to Konkurencijos taryba and obtain its clearance. However, the authority decided to apply the merger control procedure on its own initiative and oblige Piletilevi Group to submit the merger notification after suspecting that the transaction might have created or strengthened a dominant position or substantially restricted competition in the market for the distribution of tickets to various events in Lithuania, where Piletilevi Group owns two of the largest ticket distributors, namely Tiketa (which owns the website tiketa.lt) and Nacionalinis bilietų platintojas (the company owns the ticket distribution network bilietai.lt).

Having assessed the evidence collected during the merger review process, authority’s experts concluded that, following the transaction, the market share of the merging parties increased significantly. Besides, since the merger concerned the closest competitors, namely, Nacionalinis bilietų platintojas and Tiketa, the remaining competitors being less close or remote competitors to the merging parties, it was established that post-merger event organisers (customers) have limited ability to change the service provider or would face significant switching costs, while the merged entity gained the ability to increase prices, as well as to reduce quality or conditions of the services provided.

The merging parties already serve the largest number of event organisers compared to other ticket distributors, therefore, according to Konkurencijos taryba, they will continue to have an advantage over their competitors in the form of guaranteed higher revenues, financial power and more opportunities to expand and enter into new or maintain the existing exclusive agreements; the merged entity will not face significant competitive constraint from its competitors after the merger, and, moreover, other companies’ ability to enter the market will be impeded.

Having found that the merger has resulted in the creation or strengthening of a dominant position or a substantial restriction of competition in the market for the distribution of tickets to various events in Lithuania, and having concluded that the commitments, which were submitted by Piletilevi Group after the authority‘s experts’ conclusions, will not eliminate identified competition concerns, Konkurencijos taryba has refused to clear the merger. The merging parties have been obliged to restore the situation prevailing prior to the merger or to eliminate the consequences of the merger.

The Law on Competition stipulates that the intended merger must be notified to Konkurencijos taryba and clearance must be obtained if the combined aggregate income of merging parties in the business year preceding the merger exceeds EUR 20 million and the aggregate income of each of at least two merging parties in the business year preceding the merger exceeds EUR 2 million.

Konkurencijos taryba may apply the merger control procedure on its own initiative and impose an obligation on undertakings to submit a merger notification where it is likely that the transaction will result in the creation or strengthening of a dominant position or a substantial restriction of competition in a relevant market, and where no more than twelve months have passed from the implementation of the merger in question.