The Department of Justice is suing Live Nation and Ticketmaster for monopolizing the concert industry

Washington — The Department of Justice filed a federal lawsuit Thursday accusing Ticketmaster and its parent company Live Nation of illegally monopolizing the live entertainment industry to the detriment of both concert-goers and artists.

In a 128-page civil lawsuit filed in the U.S. District Court for the Southern District of New York, federal officials accuse Live Nation of illegally stifling competition and unduly burdening consumers, in part through its ownership of Ticketmaster, which effectively gives it control over much of the entertainment market Live.

Justice Department officials said Thursday they are seeking structural changes to the way the company does business that could include separating the two entities.

In 2022 Ticketmaster’s mismanagement of ticket sales for Taylor Swift’s The Eras Tour sparked massive public outcry over Live Nation’s control over the entertainment and ticketing industry. As CBS News previously reported, the Justice Department’s antitrust division was investigating the company when the Swift fiasco occurred.

Lawsuit

Attorney General Merrick Garland announced the lawsuit at the Department of Justice, outlining the main allegations contained in the complaint.

“We allege that Live Nation has illegally monopolized the live concert industry markets in the United States for far too long. Time to break it down. Americans are ready for this,” said Garland, a noted Swift fan, in a not-so-subtle nod to one of her songs.

The federal lawsuit, joined by 29 states and the District of Columbia, accused the entertainment giant of blocking industry innovation by establishing what officials call a “self-reinforcing flywheel,” using its various business components to collect all concert-related fees.

According to the complaint, this flywheel allows the company to charge customers fees and then use that revenue to attract major artists and enter into long-term deals with them to sell more tickets.

“Live Nation’s monopoly, and the anticompetitive conduct that protects and maintains that monopoly, strikes a chord precisely because at stake is an industry that has inspired, entertained and challenged Americans for generations,” the complaint said. “Behavior that undermines competition not only harms the fabric of the live music industry and the countless people who work in it, but also destroys the foundations of creative expression and art that lie at the heart of our personal, social and political lives.”

In 2010, federal regulators, including those from the Department of Justice, approved the merger of Live Nation and Ticketmaster, ultimately bringing control of the promotional, venue and ticketing industries under the control of one corporation.

But Thursday’s lawsuit said the relationship has since harmed American consumers and created barriers for artists. Senior Justice Department officials alleged that Live Nation and Ticketmaster tried to illegally squeeze money from consumers even after receiving payments from artists, through what they described as monopolistic intermediaries.

The complaint alleges that Live Nation has powerful companies that can retaliate financially if it contacts competitors, and also exercises market control by threatening to cancel future events if venues do not choose to exclusively use Ticketmaster.

The Justice Department said such control means concert-goers pay more for tickets and touring artists sign long-term contracts to perform only at venues that use the ticketing program.

Live Nation’s statement said the lawsuit “will not resolve fans’ concerns about ticket prices, service fees and access to in-demand programming.” The company stated that “(c)awarding Ticketmaster a monopoly may result in a PR victory for the Justice Department in the short term, but it will lose in court because it ignores basic principles of the economics of live entertainment,” noting that “competition continues to erode Ticketmaster’s market share and profit margin.”

“We will defend ourselves against these baseless allegations, use this opportunity to shine a light on the industry, and continue to push for reforms that truly protect consumers and artists,” Live Nation said.

At the Senate meeting in January 2023, artists he testified about the impact Live Nation had on them. Clyde Lawrence of the band Lawrence testified that Live Nation’s strength is that it is a promoter, a venue and a ticketing company.

“Because Live Nation owns the venue, contributes money to the show and sells the tickets, it has enormous power in negotiations with the artists,” he told the panel, giving an example: For one show, Lawrence set the ticket price at $30. After Ticketmaster added a 40% fee, fans were paying $42 per ticket. After paying for the band’s expenses, the band earned $12 per ticket, about half of which went to cover tour costs.