In second case, a class action lawsuit filed in 2022 on behalf of Ticketmaster customers in the U.S., Live Nation and Ticketmaster were accused of abusing the complementary relationship between their services to overcharge consumers and maintain a monopoly. “Live Nation controls the vast majority of major national touring acts and, expressly or implicitly, forces concert halls to choose Ticketmaster as their ticketing provider or risk losing high-value bands,” according to Adam Wolfson, a partner at Quinn Emanuel, the law firm representing reasons.
This type of conduct, called tying, was expressly prohibited under Art consent decree imposed on Live Nation and Ticketmaster by the Department of Justice as a condition of their merger in 2010. “We allege that they did it anyway,” Wolfson says. “Ticketmaster’s behavior is an open secret – everyone is talking about it.”
IN post on the company blog published in March Dan Wall, executive vice president of corporate and regulatory affairs at Live Nation, rejected allegations that Ticketmaster was raising ticket prices. The nominal value of the ticket is determined by the artist, he wrote, while the handling fee – from which Ticketmaster takes part of the amount – is set by the venue.
In a call with reporters, a senior Justice Department official described the defense as a “red herring” in the context of alleged antitrust violations. “Our position is that removing the lock-in that Live Nation has at all levels of the ecosystem will be beneficial to how we set prices.”
Bradley Justus, an antitrust attorney at the law firm Axinn, said a common problem in antitrust litigation is the difficulty in easily distinguishing practices that constitute anticompetitive behavior from those that could be considered sound business strategy. The Department of Justice will argue that Ticketmaster’s exclusive contracts are categorically anti-competitive. “The antitrust question is: How broad is the scope of these agreements? Are they really so broad that another competitor couldn’t enter and scale?” says Justus.
The Justice Department says the terms of the agreements mean that “venues may not consider or select competing ticket providers or switch to better or more cost-effective ticketing technology.” She argues that this has the effect of both stifling competition and minimizing the pressure on Ticketmaster to improve its own product, to the detriment of concert-goers.
While the Justice Department has filed a petition to break up Live Nation, it has not outlined the specific structural changes it intends to make or any injunctions it might try to impose on the company’s exclusivity 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 must be tailored specifically to the violation found,” a senior Justice Department official told the press. “Based on the allegation that Live Nation and Ticketmaster exercised control at every level of the ecosystem, certain aspects of the company must be broken up so that competition in the live music industry can flourish.”
Updated May 23, 2024 at 12:05 ET: Live Nation statement added.