Justice Department sues over split of Ticketmaster and Live Nation, alleging ‘monopolistic control’

WASHINGTON (AP) – Department of Justice sued Ticketmaster and its parent company on Thursday, accusing them of having an illegal monopoly on live events in America and asking the court to break up a system that stifles competition and raises prices for fans.

Filed in federal court in Manhattan, the wide-ranging antitrust lawsuit was brought against 30 state and district attorneys general and seeks to dismantle a monopoly that they say is crowding out smaller promoters, hurting artists and drowning ticket buyers in fees. Ticketmaster and its owner, Live Nation Entertainment, have a long history of clashes with top artists and their fans, including Taylor Swift and Bruce Springsteen.

“It’s time for fans and artists to stop paying the price for Live Nation’s monopoly.” Attorney General Merrick Garland he said. “It’s time to restore competition and innovation to the entertainment industry. It’s time to part ways with Live Nation-Ticketmaster. The American people are ready for this.”

The government accused Live Nation of tactics – including threats and retaliation – that Garland said allowed the entertainment giant to “strangle competition” by controlling virtually every aspect of the industry, from concert promotions to ticket sales. The effects can be seen in the “endless list of fees charged to fans,” the attorney general said.

“Live music should not be available only to those who can afford to pay the Ticketmaster tax,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “We are here today to fight for competition so that we can reopen the doors to the live music industry to everyone.”

Live Nation, which has denied violating antitrust laws for years, said the lawsuit “will not solve fans’ concerns about ticket prices, service fees and access to popular programming.”

“Calling Ticketmaster a monopoly may gain PR for the Department of Justice in the short term, but it will lose in court because it ignores basic principles of the economics of live entertainment,” Live Nation added. It said most service fees go to venues and external competition “continuously erodes” Ticketmaster’s market share. The company said it would defend itself against “unsubstantiated allegations.”

The Justice Department said Live Nation’s anticompetitive practices include using long-term contracts to prevent venues from selecting rivals, blocking venues from using multiple ticket sellers, and threatening venues that they could lose money if they did not choose Ticketmaster.

In 2021, the concert giant threatened financial retaliation against the company if one of its portfolio companies did not stop competing with Live Nation for artist promotion contracts, according to the Department of Justice.

Officials say Live Nation also acquired smaller promoters that it perceived as a threat. Live Nation’s chief strategy officer told executives that one acquisition was not “very exciting” financially but seemed “more of a defensive move,” according to the complaint.

Michael Carrier, a professor at Rutgers Law School who specializes in antitrust litigation, said the Justice Department has a strong case. He expects Live Nation will “try to shift the blame elsewhere,” such as by arguing that prices are set by artists or venues, but he said those explanations are weak.

“The Department of Justice has shown how Live Nation really has its tentacles in every element of the supply chain, which means it has far more control than it lets on,” he said. “And in terms of justification, there really isn’t much (Live Nation) can offer in terms of how it helps the consumer.”

The complaint indicates that a divorce is being considered between Live Nation and Ticketmaster. That, combined with other remedies, such as preventing some exclusive deals that restrict competition, could potentially help fans lower ticket prices, give artists more freedom in choosing venues and, in the long run, increase the success of smaller promoters, Carrier said.

Ticketmaster, which merged with Live Nation in 2010, is the world’s largest ticket seller for live music, sports, theater and more. Last month, in its annual report, the company said Ticketmaster distributed more than 620 million tickets through its systems in 2023.

About 70% of major U.S. concert hall tickets are sold through Ticketmaster, according to a federal lawsuit filed by consumers in 2022. According to records, the company owns or controls more than 265 concert halls in North America and dozens of premier amphitheaters. to the Department of Justice.

Live Nation’s reach has grown significantly over the past 10 years, according to the company’s annual financial reports. Between the end of 2014 and the end of 2023, Live Nation experienced worldwide growth of over 136% in properties in which the company “owned, leased, operated, had exclusive booking rights or had an equity interest in which we had a significant influence.”

The ticket seller caused outrage in November 2022 when his website crashed during Taylor Swift’s stadium tour pre-sale. The company said the site had been overwhelmed by both fans and bot attacks posing as consumers looking to get their hands on tickets and sell them on secondary sites. The debacle prompted congressional hearings and bills in state legislatures aimed at better consumer protection.

The Justice Department allowed the merger of Live Nation and Ticketmaster, provided Live Nation agreed not to retaliate against concert venues for using third-party tickets for 10 years. In 2019, the department conducted an investigation and found that Live Nation had repeatedly violated that agreement. The government then extended the ban on retaliation against concert venues until 2025.

“This is a failure of the current antitrust policy. And it’s something that defrauds customers every day,” said John Kwoka, an economics professor at Northeastern University who also served as a consultant to states that in 2009 concurrently investigated the original merger of Live Nation and Ticketmaster with the Justice Department.

Kwoka, who is among those who have long advocated for a breakup, notes that Live Nation and Ticketmaster have remained “largely unchecked” over the past 15 years. He points to the complaints that continue to pile up.

Ticketmaster’s clashes with artists and fans date back three decades. Pearl Jam targeted the company in 1994, years before the Live Nation merger, although the Justice Department ultimately declined to prosecute. Recently, Bruce Springsteen fans were furious over the high cost of tickets due to the platform’s dynamic pricing system.

Live Nation maintains that artists and bands set prices and decide how tickets are sold. The company’s executive vice president of corporate and regulatory affairs, Dan Wall, – wrote in the statement Thursday that factors such as rising production costs, artist popularity and online ticket scalping “are actually responsible for higher ticket prices.”

The Justice Department’s lawsuit filed Thursday is the latest example of aggressive antitrust enforcement by the Biden administration. The action targeted companies accused of engaging in illegal monopolies that eliminate competition and raise prices. In March, the Department of Justice filed a lawsuit against Apple claiming that the tech giant has monopoly power smartphone market. The Democratic administration has also attacked Google, Amazon and other tech giants.

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Grantham-Philips reported from New York. Associated Press reporters Michelle Chapman and Maria Sherman in New York and Christopher L. Keller in Albuquerque, New Mexico also contributed to this report.