Irish Competition Authority Decisions

1. This decision concerns a sponsorship agreement dated 12 January 1990 between Gallaher (Dublin) Limited and the World Professional Billiards and Snooker Association Limited (WPBSA) for a snooker tournament, which was notified to the Authority on 30 September, 1992. The notification requested a certificate under Section 4(4) of the Competition Act, 1991 or, in the event of a refusal by the Competition Authority to grant a certificate, a licence under Section 4 (2).

2. The notification concerns an agreement dated 12 January 1990 between Gallaher and the WPBSA under which Gallaher agrees to sponsor a snooker tournament in Ireland on an annual basis for five years. In return Gallaher, trading as Benson & Hedges were allowed to advertise their products at the tournament.

3. Gallaher (Dublin) Limited, incorporated in Ireland, is engaged in the production and distribution of cigarettes and other tobacco products. The World Professional Billiards and Snooker Association, a UK registered company, is the controlling and governing body for professional snooker tournaments.

4. The arrangements involved Gallaher sponsoring a snooker tournament on an annual basis from 1991-1995. Gallaher agreed to sponsor the tournament in return for the right to advertise products at the tournament. A total of 12 players were to be invited to participate in the tournament. These included the previous years winners, up to three players who could be nominated by Gallaher with the remainder being taken in priority from the WPBSA ranking list. The tournament was to be held in March of each year at Goffs, Naas. The WPBSA was to ensure that all reference to the tournament would bear the name Benson & Hedges and no other. The WPBSA was also to ensure that none of the participating players would play or participate in any snooker exhibition, snooker match, or promotional event within a radius of 50 miles of the tournament venue whilst the tournament is in progress without first obtaining the written consent of Benson & Hedges and WPBSA. (Clause 6) Gallaher promised to pay certain amounts of prize money and all other costs of the tournament. They also undertook to procure from any television or other company filming, broadcasting or recording the tournament that it only be televised, broadcast or shown within the State. (Clause 12)

5. Section 4 (1) of the Competition Act, 1991, prohibits and renders void all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State.

6. Section 3(1) of the Competition Act defines an undertaking as ´a person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service.' Gallaher is engaged for gain in the production of tobacco products and is therefore an undertaking. The WPBSA is the world body controlling and governing professional snooker tournaments. The WPBSA is an undertaking since, in the Authority's opinion, it provides services, such as assisting in the organisation and running of tournaments such as this, for gain.

7. The Authority believes that the notified arrangements do not prevent, restrict or distort competition. They do not prevent any firm from sponsoring a snooker tournament at any time other than during the week of this particular tournament. While clause 6 prevents the players involved from participating in rival events, it does so only during the tournament. To some extent, even without such a clause, any player participating in the event is implicitly precluded from playing elsewhere, since his agreement to play at one venue means he cannot play somewhere else at the same time. Technically players could play in a parallel tournament at another location when they are not actually playing in the Benson & Hedges tournament. The Authority does not believe that such a restriction prevents, restricts or distorts competition. Anyone wishing to do so could organise a rival competition involving other players. Alternatively they could organise a competition including the same players at any other time of the year if they so choose. In reality without a sponsorship arrangement such as this, no such tournament would take place at all. The requirement that the tournament only be televised or broadcast within the State does not prevent, restrict or distort competition within the State or any part of it, since it does not restrict who might film it, but only specifies that it only be broadcast or shown within the State. These restrictions applied outside of the State and did not prevent, restrict or distort competition within the State. None of the other provisions in the notified terms and conditions offend against Section 4(1).

8. In the opinion of the Authority, Gallaher (Dublin) Limited and the WPBSA Limited are undertakings within the meaning of Section 3(1) of the Competition Act, and the notified arrangements constitute an agreement between undertakings. In the Authority's opinion the arrangements do not have, as their object or effect, the prevention, restriction or distortion of competition within the State or any part of the State.

9. The Competition Authority has issued the following certificate:

The Competition Authority certifies that, in its opinion, on the basis of the facts in its possession, the sponsorship agreement between Gallaher (Dublin) Limited and the World Professional Billiards and Snooker Association Limited of 12 January 1990 for the sponsorship of a snooker tournament, notification no. CA/208/92E, notified on 30 September 1992 under Section 7, does not offend against Section 4(1) of the Competition Act.

For the Competition Authority

Patrick Massey

Member

12 September, 1995.