When tens of thousands of Taylor Swift fans were unable to complete their orders for tickets in November for her New Eras tour, those of devastated Swifties were left with little recourse. The US Department of Justice is under intense pressure to fix what many say was a mistake in allowing Live Nation and Ticketmaster to merger. If the company is found to have abused its market power, it could lead to a break up.
David Balto is an antitrust lawyer who testified against the merger before the Senate. The facts are clear: the price of tickets has gone up and the service has gone down. The landmarks of anticompetitive conduct are those.
The company cooperates with federal oversight of its business. The company has advocated for Congress to strengthen legislation banning bot purchases of tickets and has urged the Federal Trade Commission to require that ticket sellers display so-called all-in pricing.
Since the 1990s, the company has been the subject of multiple federal investigations, including one that resulted in $10 million in fines for illegally snooping on a rival and another appointment of an outside monitor who reports to the Justice Department on the company every few months. The DOJ will likely look at the company's past behavior in deciding what to do next.
The chair of the US Federal Trade Commission said that Live Nation Entertainment is too big to care. There is a certain amount of investment in their services and their products that we don't see, because they're not facing that type of robust competition
A House panel ordered Live Nation Entertainment to provide details this month on the steps it has taken to comply with the law, while the Senate is planning a hearing focused on the antitrust issues of the company.
The problems with the Swift sale were not caused by machines. Only a small portion of Swift tickets are being offered for sale.
A Live Nation Entertainment spokesman says that they always welcome the chance to discuss important issues. There are many industry reforms that would improve the experience for fans and artists.
Critics of the company have called for intervention on antitrust grounds. The Clinton administration did not act after complaints by Pearl Jam in 1994.
Live Nation, the largest concert promoter, wants to buy the largest ticketing company. The two companies became rivals as Live Nation developed a ticketing service and Ticketmaster acquired a controlling interest in an entertainment promoter. The deal was seen as a test case for the new administration's approach to antitrust.
Three people involved in the probe, who weren't authorized to discuss internal deliberations, said that Obama's top antitrust officials wanted to challenge the deal. It would be hard to win a lawsuit. Live Nation and Ticketmaster were competing against each other. The DOJ discovered that US antitrust law favors vertical tieups when it tried to block the AT&T and Time Warner merger.
Three people involved in the probe say that the DOJ's antitrust leaders agreed to a settlement because they didn't want the case to be a loss. The DOJ wanted the companies to license their software and assets to another company so they could compete with it. The antitrust complaint was resolved by the consent decree.
It was the first time that the agreement sought to alleviate concerns that one half of the business might disadvantage the other by using Live Nation's control over concerts to their advantage. The combined company had to promise not to retaliate against venues that switched promoter or ticketing services.
Corporate espionage charges have also been leveled against the company. Stephen was hired after he left a startup to sell concert tickets to fans. Justice Department prosecutors say that for the next two years, Mead and other Ticketmaster employees illegally accessed the startup's computer systems. The corporate espionage scheme became public when the startup Songkick.com filed a lawsuit.
Songkick alleged that employees of the ticket seller tried to bring down the hammer on its smaller rival by monitoring which artists were using the startup for ticket sales. When Songkick went out of business, Live Nation Entertainment terminated and paid $110 million to resolve the litigation. The full terms of the settlement were kept secret because it was a civil antitrust suit.
Songkick was put out of business by theTicketmaster. The competition wasquashed by them.
In a statement, the company said it was pleased that it was able to resolve the dispute and avoid lengthy legal proceedings.
The federal prosecutors opened an investigation. Zaidi pleaded guilty to the charges in October of last year. The lawyers for Zaidi didn't reply to a request for comment. The man who was never publicly charged and now lives in London didn't respond to a request sent viaLinkedIn.
In the final days of the Trump administration, the company paid a $10 million fine and promised to improve their compliance. If the company doesn't violate the law, the computer fraud and conspiracy charges will be dismissed.
The two employees were fired and prosecuted for violating company policy. Dan Wall is an antitrust attorney at Live Nation Entertainment's law firm Latham & Watkins.
According to a person familiar with the antitrust investigation, the agency spent 15,000 hours probing competition complaints about the concert promotion and ticketing company. The probe initially focused on more than a dozen potentially problematic negotiations between Live Nation and venues, before zeroing in on six instances in which the company threatened to cut ties with venues if they switched to another company
The company was sued by the Justice Department over alleged violations of the 2010 settlement, according to a person with knowledge of the situation. Live Nation Entertainment settled the complaint in 2019.
Live Nation Entertainment has a reputation for threatening behavior and retaliation since the 2010 merger, according to court documents.
The agreement imposed an external monitor who was a former federal judge from the law firm. Live Nation Entertainment didn't have to admit liability for violating the 2010 consent decree under the new settlement.
17 states signed on to the merger of Live Nation and Ticketmaster. The Justice Department did not involve the states in the negotiations of the new deal.
The first set of charges against Zaidi were filed in October, but neither the states nor the DOJ prosecutors were aware of them. They weren't authorized to discuss the deliberations so they asked for anonymity.
The DOJ did not comment on the antitrust case. Delrahim, who is now a partner at Latham & Watkins, was involved in the DOJ case, so he is no longer doing work for Ticketmaster.
The Justice Department is expected to challenge the ticketing giant in the wake of the Taylor Swift incident. The Biden DOJ's top antitrust official has been skeptical of merger settlements like the one used in the Live Nation deal, arguing that it's not their role to micromanage corporate decision-making. When consumers are paying high fees and have few options, the agency should bring more cases against alleged monopolies.
Henry Hauser, a former DOJ antitrust lawyer, says that the Justice Department made a "strategic choice" to renegotiate the settlement. The antitrust counsel at the law firm Perkins Coie says that the DOJ needs to say that this is a win. They still have a lot on the table.
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