Ticketing, Dynamic Pricing, and Loyalty Programs: Abuse of Dominant Position
1. Introduction
With the digitalization of the sports economy, ticketing systems have shifted from classic box office sales to entirely digital platforms. This transformation has increased revenue diversification for clubs while creating a new area that has attracted the attention of competition law: dynamic pricing and loyalty programs.
Clubs establishing their own ticketing platforms, determining sales prices with algorithms, and managing fan loyalty through point or membership systems can affect competition both vertically and horizontally. In this context, Article 6 of the Law No. 4054 on the Protection of Competition is directly related to the prohibition of "abuse of dominant position".
This article will examine in detail the implications of digital ticketing models in the sports sector for competition law, determining dominant position, forms of abuse, and solutions.
2. Economic and Legal Nature of Ticketing Systems
2.1. Ticketing: Goods or Services?
The ticketing system is a hybrid legal transaction providing both a service (the right to watch a match) and access rights . A ticket is not an ownership document, but a contractual document permitting use under specific conditions. Therefore, activities related to ticket sales are considered within the scope of the service market .
2.2. Digital Ticketing Platforms
In Turkey, ticket sales have long been conducted through a centralized system called Passolig (Aktif Bank A.Ş.) . This situation creates a combination of single buyer (monopson) and single seller (monopoly) from a competition law perspective. Such a structure necessitates a "dominant position" analysis in accordance with Article 6 of Law No. 4054.
3. Article 6 of Law No. 4054: Abuse of Dominant Position
Article 6 of Law No. 4054 contains the following provision:
"It is prohibited for one or more undertakings to hold a dominant position in the whole or a part of the country and to abuse this position."
Under this article, a dominant position is the ability of an undertaking to act independently of its competitors.
Sports clubs or ticketing companies may fall under this definition due to their influence over fan bases or league organizations.
3.1. Determining the Dominant Position
According to the established jurisprudence of the Competition Board (for example, Biletix Decision No. 2013/12-62), a dominant position is determined based on the following elements:
-
Relevant product market: Live sporting event ticket sales service.
-
Relevant geographical market: within the borders of the Republic of Turkey.
-
Market share: Above 40-50% indicates dominance.
-
Barriers to entry: Infrastructure, licensing, or exclusivity agreements.
In the case of Passolig, most of these elements are present.
3.2. Types of Abuse
Abuse of dominant position in ticketing can manifest in the following ways:
-
Excessive pricing
refers to the practice of driving matchday ticket prices to astronomical levels through dynamic pricing algorithms. -
Tying:
Required credit card usage, membership, or participation in a loyalty program to purchase tickets. -
Discriminatory pricing refers
to different pricing policies based on fan groups, age, or region. -
Data exploitation
refers to the sale of fan data to advertising or sponsoring companies.
The Competition Authority considers such behavior a serious violation under Article 6
4. The Implications of Dynamic Pricing Systems in Competition Law
4.1. What is Dynamic Pricing?
Dynamic pricing is the process where ticket prices change in real-time based on supply and demand, weather conditions, match importance, or past sales data.
This system increases economic efficiency; however, price transparency .
4.2. Competition Board Decisions
In its decision numbered 2018/14-261 , the Competition Board examined the pricing algorithms of online ticketing platforms and established the following criteria:
-
The algorithm should not be manipulative
-
The price increase is cost-based,
-
The consumer should be provided with clear information beforehand.
These criteria also define the boundaries that sports clubs should consider in their digital ticketing strategies.
5. Loyalty Programs and Data Domination
Loyalty programs are point, discount, and membership systems used to encourage regular fan attendance at matches.
However, these systems create two risks under competition law:
-
The linking effect:
Making loyalty membership mandatory with ticket purchase. -
Data-driven market power:
Preventing other clubs from accessing loyalty data or using it as a non-market advantage.
The Turkish Competition Authority's 2021 Digital Markets Reportemphasizes that "data dominance" poses a stronger competitive risk than traditional market dominance.
6. EU Competition Law Perspective
In European Union competition law, similar situations are assessed under TFEU Article 102
6.1. EU Commission Decisions
-
Ticketmaster (2019):
The Commission found that Ticketmaster engaged in “excessive commission practices” based on its data monopoly in the ticketing market and excluded smaller organizers. -
FIA Formula 1 (2001):
Ticket sales through a single distributor were banned on the grounds of closing the market.
These decisions the market-exclusionary behavior of digital monopolies in the sports sector violates competition law.
6.2. Proportionality Test
In the Deutsche Telekom (C-280/08) and Google Shopping (C-48/20 P) decisions, the CJEU developed the "proportionality" test for determining whether a dominant position has been abused. This test looks for three criteria:
-
The restriction for a legitimate purpose .
-
the appropriate vehicle ,
-
The result proportionate .
These criteria also constitute a binding legal framework for the digital ticketing policies of sports clubs and the Turkish Football Federation (TFF).
7. Scope of Application in Turkish Sports Law
In Turkey, the sports ticketing system has been integrated into the Passolig system under Law No. 6222 on the Prevention of Violence and Disorder in Sports . However, this integration is controversial in terms of both the processing of personal data and the restriction of competition .
7.1. Competitive Aspect
The Passolig system, by offering fans service through a single channel, prevents alternative ticketing companies from entering the market , thus creating a foreclosure effect
7.2. GDPR Aspect
The integration of loyalty and membership data with the financial system is also subject to oversight under the Law No. 6698 on the Protection of Personal Data (KVKK) . Failure to obtain "explicit and separate" consent for data processing may constitute a violation of both the KVKK and competition law.
8. CAS (Court of Arbitration for Sport) Perspective
CAS does not directly issue competition law rulings; however, it interprets the principle of "fair competition" with regard to fan access rights and club licensing processes.
2015/A/4206 (Trabzonspor v. UEFA) , CAS emphasized that economic imbalances between clubs contradict the essence of competition.
Therefore, the monopolization of revenuecan indirectly lead to the distortion of sporting competition.
This is considered contrary to the "fair competition" principle in CAS case law.
9. Solution: Competition-Compliant Digital Ticketing Model
Digitalization is inevitable in the sports sector. However, this process should be managed in a way that strengthens consumer welfare, not competition.
The "competition-friendly model" proposed below is broadly aimed at this goal:
-
Multi-Platform Access:
Ticket sales should be available on licensed alternative platforms instead of just one channel. -
Transparent Pricing:
Dynamic pricing algorithms should be subject to regular independent audits. -
Data Sharing:
Fan data between clubs should be shared fairly and anonymized. -
Membership Requirement Elimination:
Ticket sales should not be linked to financial card membership. -
Competition Compliance Program:
The Turkish Football Federation (TFF) and clubs must bring their ticketing processes into compliance with the guidelines of the Competition Authority.
10. Conclusion
Ticketing, dynamic pricing, and loyalty programs are essential elements of the modern sports economy.
However, when these systems are used in a manner that violates the principles of transparency and access, to abuse of dominant position .
The aim of competition law is not to limit the revenues of clubs, but consumer interests and freedom of market access .
Therefore, in Turkey, regulatory oversight in the field of digital ticketing in line with EU standards and of competition compliance programs into the sports sector will form the basis of a fair competition structure for the future.
About Post Author
