Shares of Live Nation Entertainment are falling after the Justice Department announced an antitrust lawsuit

UPDATE: This article has been updated with a photo from the Department of Justice press conference, the latest stock price information and a stock price chart.

Shares of Ticketmaster’s parent company, Live Nation Entertainment (LYV), fell sharply on Thursday after the U.S. Department of Justice announced an antitrust lawsuit against the ticketing and concert giant seeking to break up the company.

The Department of Justice, along with attorneys general from 29 states and the District of Columbia, filed a lawsuit against Live Nation on Thursday, accusing the company of using anti-competitive tactics to gain control of the live events industry.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopoly control over the U.S. live events industry at the expense of fans, artists, smaller promoters and venue operators,” said U.S. Attorney General Merrick Garland.

“As a result, fans pay more in fees, artists have fewer opportunities to play shows, smaller promoters are squeezed out and venues have less real choice in ticketing services. It is time to part ways with Live Nation-Ticketmaster,” Garland added.

Live Nation Entertainment shares fell 8.0% to $93.30 around 2 p.m. ET on Thursday. The stock lost value after that Bloomberg reported late Wednesday that a lawsuit was imminent, and the stock had already fallen last month when Wall Street Journal informed that a lawsuit is being prepared.

The Justice Department says Live Nation is using its power to harm venues, artists and consumers

The government alleges that Live Nation uses its control over venues across the country to influence artists to perform at those with which it partners, and to intimidate venues and artists into choosing a ticketing service and promotion other than Ticketmaster.

The company’s dominant position in the industry allows Ticketmaster and Live Nation to charge excessively high prices and a series of fees that make tickets too expensive for many consumers, the Justice Department says.

To remedy the situation, the Justice Department is seeking to split Live Nation Entertainment, which includes Live Nation, which serves as the venue operator and event promoter, and Ticketmaster, which sells tickets. The Department of Justice approved the merger of the two companies in 2010 under several conditions, including: provided that Live Nation will not retaliate against venues or artists for selecting ticket sellers other than Ticketmaster, which was violated in the complaint, Live Nation said.

Live Nation denies the claims and says low margins prove it is not a monopoly

Live Nation has repeatedly denied operating as a monopoly or retaliating against or threatening venues, artists or other smaller event organizers. In a lengthy response to the Justice Department’s lawsuit published Thursday, Live Nation said the Justice Department is trying to portray Ticketmaster as the sole cause of high ticket prices when it claims there are many more factors.

The company said Ticketmaster’s 5% commission rate is among the lowest of any digital marketplace, pointing to higher fees from companies like Uber (UBER), Stubhub and the Apple (AAPL) App Store as evidence that it doesn’t fit the definition of a monopoly benefiting from monopoly prices.

Live Nation also addressed its relatively low profitability, especially compared to other tech giants targeted by the Biden administration in its antitrust actions, including Meta Platforms (META), Apple and Alphabet parent Google (GOOGL).

“Most importantly, Live Nation can and has offered fans, artists, venues and the rest of the performance ecosystem better prices and better service than they would receive if these complementary businesses were separated,” the company said. “Ticketmaster in particular is a much better, more artist- and fan-focused company under Live Nation than it ever was as a standalone company.”