Random Image Display on Page Reload

US Sues to Break Up Ticketmaster and Live Nation, Alleging Monopoly Abuse

If you buy something using links in our stories, we may earn a commission. Learn more.

May 23, 2024 10:30 AM

US Sues to Break Up Ticketmaster and Live Nation, Alleging Monopoly Abuse

The US government has filed an antitrust suit against Ticketmaster and its parent company, Live Nation, for allegedly abusing their dominance in the ticketing market to extinguish healthy competition.

Photo of Taylor Swift fans protest against Ticketmaster in front of the Capitol.

Photograph: Kenny Holston/The New York Times/Redux

The US Department of Justice has sued Ticketmaster and its parent company, Live Nation Entertainment, for abusing their alleged monopoly in the ticketing market to trample competitors.

Filed on Thursday in the Southern District of New York, the lawsuit focuses on Ticketmaster’s long-term exclusivity contracts with many of the largest music venues, making it the predominant ticketing service available to concertgoers. The firm secures these deals in part by “threatening and retaliating against venues that work with rivals,” the DOJ alleges.

In the complaint, the DOJ accuses Ticketmaster and Live Nation, which acts as a promoter for hundreds of high-profile artists, of exploiting their relationship to establish a “self-reinforcing flywheel” that blocks competitors from gaining a foothold. Live Nation parlays its exclusive promotion deals into exclusive ticketing deals with venues, the DOJ claims, which are left with no practical choice but to go with Ticketmaster, for fear of losing access to sought-after acts represented by its parent company. The DOJ is seeking to break up the joint organization.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” says attorney general Merrick Garland in a statement. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation–Ticketmaster.”

In a lengthy statement provided to WIRED, Live Nation disputes the DOJ's allegation that it and Ticketmaster wield monopoly power. “The DOJ's lawsuit won't solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows,” the company says. “Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin.”

The charges brought by the DOJ mirror allegations made previously against Ticketmaster in two ongoing private lawsuits.

In December 2022, Ticketmaster was sued by hundreds of Taylor Swift fans, who brought a case in response to a high-profile ticketing debacle that reportedly left them queuing for hours to pay for tickets that they had been assigned under an early access program, with many ultimately unable to claim their allocations. The incident led to a hearing by the Senate Judiciary Committee on consolidation in the ticketing industry and, reportedly, helped catalyze the investigation into Ticketmaster by the DOJ.

In their lawsuit, the Swift fans accused Ticketmaster of abusing its dominant position to impose “higher prices in the presale, sale, and resale market for concert tickets.” The company has “effectuated this anticompetitive scheme by forcing fans of musicians to use Ticketmaster exclusively to buy concert tickets,” the lawsuit alleged.

In the second case, a class action brought in 2022 on behalf of Ticketmaster customers in the US, Live Nation and Ticketmaster were accused of abusing the complementary relationship between their services to overcharge consumers and sustain their monopoly. “Live Nation controls the vast majority of the big national touring acts and, either explicitly or implicitly, coerces concert venues into selecting Ticketmaster as their ticketing service provider on pain of losing high-value acts,” claims Adam Wolfson, a partner at Quinn Emanuel, the law firm representing the plaintiffs.

This type of conduct, known as tying, was explicitly forbidden under the consent decree imposed upon Live Nation and Ticketmaster by the DOJ as a condition of their 2010 merger. “Our allegation is that they did it anyway,” says Wolfson. “Ticketmaster’s behavior is an open secret—everyone talks about it.”

In a corporate blog post published in March, Dan Wall, executive vice president of corporate and regulatory affairs at Live Nation, rejected allegations that Ticketmaster is driving up the price of tickets. The face value of a ticket is decided by the artist, he wrote, while the service charge—from which Ticketmaster draws its cut—is set by the venue.

In a call with reporters, a senior DOJ official described this line of defense as a “red herring” in the context of the alleged antitrust violations. “Our position is that removing the chokehold that Live Nation has at all levels of the ecosystem will be beneficial with respect to the way prices are set.”

A problem common to antitrust disputes, says Bradley Justus, an antitrust attorney at law firm Axinn, is the difficulty in distinguishing easily between practices that amount to anticompetitive behavior and those that might be considered sensible business strategy. The DOJ will argue that the exclusive deals entered into by Ticketmaster are categorically anticompetitive. “The antitrust question is: How extensive is the scope of those agreements? Are they truly so broad that another competitor couldn’t enter and scale?” says Justus.

The DOJ claims that the terms of the contracts mean that “venues cannot consider or choose rival ticketers or switch to better or more cost-effective ticketing technology.” The effect, it claims, is both to stifle competitors and minimize the pressure for Ticketmaster to improve its own product, to the detriment of concertgoers.

Although the DOJ has petitioned for Live Nation to be broken up, it has not outlined the specific structural changes it will go after, nor any injunctions it may try to impose with respect to the company’s exclusive contracts. “A breakup is absolutely on the table, but it’s important not to put the cart before the horse. In antitrust cases, any remedy has to be specifically tailored to the violation found,” a senior DOJ official told the press. “Based on the allegation that Live Nation and Ticketmaster have exerted control at every level of the ecosystem, aspects of the company need to be broken apart in order for competition to flourish in the live music industry.”

Updated 12:05 pm ET, May 23, 2024: Added statement from Live Nation.

Joel Khalili is a reporter for WIRED, covering crypto, Web3, and fintech. He was previously an editor at TechRadar, where he wrote about the business of technology, among other things. Before turning his hand to journalism, he studied English literature at University College London.
    Read More

    Judge Hints at Plans to Rein In Google’s Illegal Play Store Monopoly

    “Google as an illegal monopolist will have to pay some penalties,” US federal judge James Donato said Thursday, in a hearing discussing next steps after a jury found the company breached antitrust laws.

    Paresh Dave

    The Race to Buy TikTok Is On—but There Might Not Be a Winner

    Investors are interested in buying TikTok so that it can avoid a US ban. But even if ByteDance accepts, a takeover will be far from simple.

    Louise Matsakis

    Musi Won Over Millions. Is the Free Music Streaming App Too Good to Be True?

    Musi’s free music streaming app is a hit with thrifty teens. The app claims to tap content on YouTube, but some in the music industry question the legitimacy of that model.

    Kate Knibbs

    Most US TikTok Creators Don’t Think a Ban Will Happen

    The Chinese-owned app is in serious trouble in Washington, but a survey of US creators suggests TikTok’s influencer economy is carrying on with business as usual.

    Louise Matsakis

    FTX Creditors Say Payout Deal Is 'an Insult'—and Plan to Revolt

    FTX has a plan to repay its former crypto customers more than the billions of dollars they lost in the latest bankruptcy proposal. But some will reject it anyway.

    Joel Khalili

    WeWork Survived Bankruptcy. Now It Has to Make Coworking Pay Off

    The troubled company is back from the brink, but will emerge from bankruptcy to a world where coworking’s long-term future is much less certain.

    Amanda Hoover

    Craig Wright Lied About Creating Bitcoin and Faked Evidence, Judge Rules

    A UK judge has determined that Craig Wright forged evidence in a campaign to prove he is Satoshi Nakamoto, creator of Bitcoin, in a move that prevents him from bringing further lawsuits in the country.

    Joel Khalili

    Google’s AI Overview Search Results Copied My Original Work

    Google’s AI feature bumped my article down on the results page, but the new AI Overview at the top still referenced it. What gives?

    Reece Rogers

    *****
    Credit belongs to : www.wired.com

    Check Also

    New research highlights where ‘The Big One’ earthquake could hit

    The research, recently published in the prestigious journal Science Advances, produced the most detailed picture …