SISO Calls Service Exclusives Anticompetitive

HIL ANDERSON, SENIOR EDITOR
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Boston, MA – Exclusive services offered by convention centers are bad for business and potentially illegal under U.S. antitrust law, the Society of Independent Show Organizers (SISO) said in a statement released by the board August 16.

While venue managers may consider cornering the market on various services as a convenient revenue stream to be tapped to help cover their own overhead, show organizers see them as a dangerous long-term drag on their ability to offer cost-effective services to their own customers. “Requiring organizers to use exclusive services impedes our ability to deliver a competitive return on investment for our exhibiting customers,” said SISO Chair Nancy Hasselback, CEO of Diversified Business Communications.

SISO Warns of Antitrust Aspect
In addition, the SISO statement said the idea of requiring show organizers to use in-house services smacks of unfair monopolistic behavior. “SISO considers exclusive services as anticompetitive and potentially in violation of U.S. antitrust statutes that prohibit agreements which unreasonably lessen or restrict competition,” the statement said.

The idea that exclusives violate federal antitrust law is being tested in San Diego. United Maintenance Companies is challenging a 2007 policy that requires them to hire the San Diego Convention Center’s cleaning crew for its booth cleaning contracts. United Maintenance said the higher wages and revenue-sharing demands of the convention center have effectively frozen them out of the venue. The case is on track for a jury trial in federal court sometime next year.

Exclusives a Harmful Hassle
The SISO board said allowing outside vendors to compete for trade show business would benefit both the exhibition industry and the host cities in the long run by keeping exhibitor costs down. Failing to contain costs, particularly at a time when corporate marketing dollars are tight, could backfire on convention centers by discouraging attendance and even driving trade shows to more affordable cities.

Exclusives can also contribute to the so-called hassle factor for organizers that have multi-event deals with various service contractors. Hasselback said such relationships are aimed at streamlining service and keeping costs down. “When this process is interrupted by exclusive arrangements, it requires us to review our service and pricing to our customers,” she said.

Industry Showing a United Front
The SISO statement was cheered by other exhibition industry associations, including the International Association of Exhibitions and Events (IAEE), and the Exhibition Services & Contractors Association (ESCA).

“It mirrors our position on exclusive services and reflects the fact that in-house exclusives rarely, if ever, add any value to the exhibition experience and almost always result in a diminishment of quality and higher prices,” said IAEE President Steven Hacker.

Larry Arnaudet, executive director of ESCA, urged show organizers and meeting planners to review the policy on exclusives at individual venues and “challenge those policies that restrict their right to select service providers of their choice and prohibit service contractors from providing those services.”

Reach Nancy Hasselback at (207) 842-5500 or nhasselbach@divcom.com; Lew Shomer, SISO executive director, at (310) 450-8831, x106, or lshomer@shomex.com; Steven Hacker at (972) 458-8119 or shacker@iaee.com; Larry Arnaudet at (972) 447-8210 or larrya@augustagroup.org