Competition law and the music II: the Luxembourg Centre de Musique Amplifiées case

By a decision handed down on 25 May 2016 the Luxembourg Competition Authority (LCA) has closed also the second investigation into abusive conducts in the markets for the organization of music concerts. The first investigation was opened against Philharmonie, which was then aquitted of any allegations (Case n. 2015-RP-02, Philharmonie, http://www.concurrence.public.lu/fr/decisions/abus-de-position-dominante/2015/decision-2015-rp-02/Decision-n_-2015-RP-02-du-22-5-2015.pdf). The second decision was taken with regard to Centre de Musique Amplifiées (CMA), which was found to not have infringed competition (Case no. 2016-FO-02, Centre de Musique Amplifiées).

CMA was a public law entity created by the Law of 26 May 2004, which entrusted it with the tasks to organize amplified music concerts, manage its music halls and its other assets. The abusive conducts allegedly carried out by CMA included organizing loss-making concerts by reason of the public funding granted by the State, charging excessive prices on audiences and for the rent of its main hall, discriminating its competing concert promoters as for access to the music halls it managed.

As previously held in the Philharmonie case, also the CMA activities were found to fall within the remit of competition law because of their economic nature. Therefore, the LCA opened an antitrust investigation against CMA on the basis of Article 5 of the Luxembourg Competition Act corresponding to Article 102 TFEU. Indeed, the LCA considered that CMA had a dominant position in the market for the organization of music concerts. To establish whether it had abused its dominant position by charging anti-competitive prices, it asked an accounting expert for an opinion. On the basis of the estimation of all the revenues generated and the expenses incurred by CMA in the organization of concerts, the opinion showed that CMA made a small profit. That, in the LCA view, ruled out that CMA charged excessive or predatory prices. It remained to be seen, however, whether the public funds granted to it amounted to unlawful State aid.

Interestingly, in Centre de Musique Amplifiées the LCA relied on the opinion of accounting expert on the costs and revenues of the dominant undertaking to establish whether the pricing policies of the latter were abusive. It may be worth noting that, though the LCA acquitted CMA from all allegations of competition breaches, nevertheless LCA blamed CMA for its behaviour during the procedure. With quite a harsh language, the LCA said that it would have closed the investigation before if CMA had been more cooperative, also taking into account the fact the allegation against CMA were unfounded. To avoid the occurrence of competition concerns similar to those that triggered the Centre de Musique Amplifiées case, the LCA invited CMA to implement a sufficiently detailed accounting separation of revenues and costs associated to the organization of concerts and the renting of music halls, respectively. Such a measure should dispel the risk that in future CMA may abuse its dominance in the above markets.