January 20 – MATCH Services, FIFA’s accommodation partner for the 2014 World Cup in Brazil, has had all charges that it was leveraging “abusive” prices in the hotel market with tickets for matches dismissed by CADE, Brazil’s anti-competition authority.
Embratur, Brazil’s tourist authority, conducted an investigation that lead to charges in 2013 by the Federal Public Prosecutor that MATCH, which had secured hotel accommodation for the championship across the country, was artificially hiking room rates and using match tickets to push the prices up (match tickets can only be sold at face value under FIFA regulations) – “tying sales”.
MATCH was contracted by FIFA to deliver accommodation the World Cup the organization and its staff and guests, all teams (including team base camp hotels and the hotels used by the teams in the Host Cities during the event), and FIFA service providers (TV broadcasting, ticketing and IT services).
To fulfill the requirement MATCH contracted with about 750 hotels in the 3 to 5 star category across Brazil, securing in the region of 200,000 room nights. Accommodation could be booked by fans travelling to Brazil though the official site, but only after official allocations had been taken.
One accusation was that with so many rooms controlled by one party, the competitiveness in the market was effectively removed. Add in the incentive of tickets with the rooms, then abuse of market position takes place. With prices for rooms in Brazil rocketing the concerns were obvious.
But the CADE decision rules that the marketplace was not artificially manipulated by MATCH, in fact, exactly the opposite and that World Cup demand was the driver of prices, clearing MATCH of all charges.
It also cleared MATCH of making ‘abusive margins’ on the room rate prices – MATCH said its packages are discounted by 0% to 20% while its average sales margin was estimated at 18%, while the maximum sales margin charged to individual customers was 30%.
CADE found that the contentious 30% margin was acceptable as MATCH in these cases was taking all the business risk
CADE ruled that in order to manipulate hotel accommodation prices in any local market then MATCH would have need to have 20%, however MATCH did not reach those levels and that there were plenty of options for consumers to buy directly from hotels or travel agencies.
As regards tying tickets to rooms, CADE said that MATCH was only the operational and technical service provider to FIFA and as such did not have any authority regarding the actual conditions of ticket sales and was not making room purchase a condition of ticket buying. It pointed out that consumers did not have to buy packages with accommodation and tickets together.
The decision – actually made in December – could have an impact on the case of Ray Whelan, the British director of FIFA’s World Cup marketing affiliate Match who was arrested at the World Cup in July, accused of selling VIP World Cup tickets at inflated prices.
Whelan was eventually released on bail and was even allowed to travel to the UK, but will return to Brazil where he will attend court to face charges. However, with the finding by CADE in favour of MATCH and serious cracks appearing in the case against Whelan, the charges look to be proceeding on spurious grounds. http://www.insideworldfootball.com/world-cup/15843-match-s-whelan-in-uk-but-will-return-to-brazil-for-court-dates?highlight=WyJyYXkiLCJ3aGVsYW4iLCJyYXkgd2hlbGFuIl0=
CADE has now closed its investigation and sent its decision to SENACON, the Brazilian consumer protection authority, which is reviewing a similar accommodation-related matter involving MATCH.
Jaime Byrom, chairman of MATCH Services commented: “MATCH Services is delighted to see its approach and implementation of the accommodation operations for the 2014 FIFA World Cup™ fully vindicated by the findings of CADE. This landmark ruling shows that our company has fulfilled its complex mandate to
serve key constituent groups of FIFA’s flagship competition completely in line with Brazil’s laws and regulations.”
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