Following an investigation by the National Commission for the Defence of Competition (CNDC, for its acronym in Spanish), the authority recommended to the Secretary of Commerce to sanction ALLIANCE S.A.S. with a fine of 150 million pesos ̶ the maximum possible under Law 25. 156, which was in force at the time of the facts ̶ and the company GRISÚ S.A. with a fine of 90.3 million pesos for finding evidence of the existence of a collusive agreement to fix prices and divide the discotheque services market for student tourism in the city of Bariloche.
The CNDC also ordered that the nightclub “Genux” (CADEHSUR S.A.) should not be controlled by any person or legal entity related to ALLIANCE, nor its directors or shareholders.
The investigation began in 2018 following a complaint by the managing partner of POWERLINK, a company dedicated to organising shows and meetings of an artistic and cultural nature in the establishment called “Puerto Rock Bariloche” and which, for student tourists visiting the city of Bariloche, organises the so-called "welcome party" and other parties aimed at this public.
The companies complained of, ALLIANCE and GRISÚ, offer discotheque services in the city of Bariloche and, specifically, offer this type of service to tourist agencies that market student travel packages for secondary school leavers throughout the country. Specifically, the company ALLIANCE operates the discotheques “By-pass”, “Rocket”, “Cerebro” and “Genux”, while the company GRISÚ operates the discotheque of the same name, all of them located in the city of Bariloche, province of Río Negro.
The investigation corroborated that the companies ALLIANCE and GRISÚ established an agreement for the joint fixing of ticket prices for the discotheques operated by them, issuing a single price list which they periodically sent to the tourist agencies, including the percentage increase. In cases where there were negotiations with the tourist agencies regarding price and payment conditions, these were based on the single price list.
Likewise, a market-division agreement by time slot was verified between the companies denounced and the complainant, POWERLINK. This agreement was implemented by means of a "Memorandum of Understanding" that was in force from 2004 to 2017. The division scheme was based on the partition of the market into two time phases: the "Pre Dancing" segment, from 5 p.m. to midnight, and the "Nightclub" segment from midnight onwards. The distribution of the market was organised with the company POWERLINK in the "Pre Dancing" segment, offering the "welcome party" and other parties, and the companies ALLIANCE and GRISÚ, in the "Night Disco" segment, offering discotheque services in the dance establishments “By-pass”, “Rocket”, “Cerebro”, “Genux” and “Grisú”. At the same time, the distribution of clients was corroborated so that, throughout the duration of the graduation trip, the students would attend at least one night at each discotheque, and so that they would attend the parties provided both in the “Pre – dancing” and “Nightclub” segments.
These concerted practices generated a clear prejudice directly to student tourism agencies at the national level and indirectly to the students who ultimately choose the city of Bariloche as a destination for graduation trips. Indeed, the concerted practices allowed the companies to charge higher prices than those that would have prevailed in the absence of the conduct and to have a better bargaining position vis-à-vis the tourist agencies, as well as preventing final consumers from purchasing a different number of nights in discotheques than those established by the investigated firms.
In addition to the fines applied to ALLIANCE and GRISÚ and the deconcentration ordered to ALLIANCE, the CNDC: (i) ordered ALLIANCE, GRISÚ and POWERLINK to cease cartelisation and the exchange of information, and to proceed to market and set commercial conditions independently and competitively and; (ii) ordered ALLIANCE to refrain from marketing club nights on behalf of third parties and, in particular, not to cooperate or coordinate the joint selling of club services with other operators, not to require third parties to enter into any exclusive negotiations that would condition the purchase of services from ALLIANCE, GRISÚ, POWERLINK or any other competitor, and to refrain from joint ticket sales for the clubs it controls and/or manages.
Although POWERLINK, like ALLIANCE and GRISÚ, was found responsible for the above-mentioned concerted practices, the CNDC decided not to impose a fine on this company because of its cooperation with the authority in providing sufficient evidence for the detection of the above-mentioned conducts.
Price agreements are considered by the competition law to be the most serious type of infringement and for which the most severe sanctions should be applied, as they generate significant damage to the general economic interest and the welfare of consumers.