DOJ Sets its Antitrust Eyes on Live Nation - Ticketmaster
The WasteWatcher
The U.S. Department of Justice (DOJ) has filed a lawsuit against Live Nation – Ticketmaster under federal antitrust law for “monopolizing markets across the live concert industry.” In a statement about the case on May 23, 2024, the DOJ alleged that Live Nation – Ticketmaster employs aggressive tactics that force customers to pay more for tickets while hindering competition of smaller companies and restricting artists from obtaining shows. The statement called the actions an example of “when a monopolist dedicates its resources to entrenching its monopoly power and insulating itself from competition.”
The allegations include supposed exploitation of the “competitor-turned-partner” relationship with Oak View Group (OVG), which signed a deal with Ticketmaster in 2021, to employ their technology in OVG’s venues; retaliation against potential rivals from entering the industry; threats to venues that cooperate with other competitors; claims that the company “locks” live concert venues into long-term exclusive contracts; prevention of venues from utilizing multiple ticketers; restricting artists from performing at key venues unless they hire Ticketmaster as a promoter; and finally, the acquisition of smaller promoters and potential competitors.
The DOJ’s allegations do not line up with the nature of the ticket sales and distribution industry. Ticketmaster collects a smaller share of ticket sales than the venues and artists themselves, and as noted in an April 12, 2018 Government Accountability Office report, “Other parties that play a role in event ticketing, as discussed later in this report, include artists and their managers, booking agents, sports teams, producers, promoters, and operators of event venues (such as clubs, theaters, arenas, or stadiums).” According to Live Nation Executive Vice President Dan Wall, Ticketmaster regularly charges service fees lower than other ticketing sites like SeatGeek and AXS and earns profits that rank it on the “lower end of profitable S&P 500 companies.” The firm presented data to the DOJ refuting the market power allegations but it “conflicted too much with their preordained narrative,” said Wall.
When the Obama administration approved the merger between Live Nation and Ticketmaster in 2010, the DOJ predicted an “ailing” ticketing industry characterized by “thin” profit margins as performers gained more bargaining power to capture concert revenue. Contrary to these pessimistic predictions, however, the industry has thrived and innovated since the merger, outside of a brief pause during the pandemic
On May 15, 2024, the House of Representatives passed H.R. 3950, the TICKET Act, by a vote of 388-24. The legislation, which was supported by ticket sellers including Live Nation – Ticketmaster and StubHub as well as consumer groups and artists, would increase ticket pricing transparency by requiring primary and secondary market ticket sellers to disclose at the outset of the transaction all costs for the ticket, including the base price and every fee including services, processing, delivery, and taxes. That price must also be provided in any advertising. Currently, the fees are disclosed at checkout, and buyers must look at numerous websites all the way through the buying process to compare prices. And the legislation would only allow the sale of tickets that are in the seller’s possession. Currently, sellers can display tickets for sale that they do not have, leading to anxious buyers often waiting until the day of the event, often within an hour or two from the beginning of the event, to have them delivered.
The Senate companion bill, S. 1303, was reported favorably by the Senate Commerce, Science, and Transportation Committee on April 26, 2023, and placed on the Senate calendar on September 9, 2023, but to date there has not been a vote on passage.
The DOJ’s lawsuit will fail to enhance competition in the ticketing market or bring down prices for consumers. The fees that consumers pay for tickets are set by the artists and their business teams, not by Live Nation - Ticketmaster. And there is already a large and competitive ticket resale market where consumers can buy tickets without going through Ticketmaster on websites including Seatgeek, StubHub, and TickPick.
The lawsuit fails to take into consideration the impact on ticket prices and demand that has occurred following the COVID-19 pandemic. According to data from Live Nation - Ticketmaster, 145 million people attended a concert or sporting event at a Live Nation venue in 2023, which is a 20 percent increase from the 98 million people who attended in 2019.
The ticket marketplace is already large and competitive and the DOJ’s lawsuit against Live Nation - Ticketmaster would be a waste of time and fall short of its goals of increasing competition and bringing down prices for consumers.
-- G.K. Do