The U.S. Department of Justice has opened an investigation into claims that Live Nation and Ticketmaster are violating antitrust laws and will be filing a lawsuit soon.
Maybe.
The DOJ won’t comment on an open investigation, but The Wall Street Journal and Bloomberg have both reported the department will be filing a lawsuit in May over the company’s alleged violations of antitrust laws. According to the Journal, the suit “would allege the nation’s biggest concert promoter has leveraged its dominance in a way that undermined competition for ticketing live events,” though the specific claims were still unknown.
And Bloomberg reports the DOJ’s actions are “aimed at forcing Live Nation Entertainment Inc. to spin off its Ticketmaster ticketing business … amid concerns Live Nation has illegally tied its concert promotion services to use of Ticketmaster.”
If the lawsuits are filed, one person who won’t be surprised is John Breyault, vice president for Public Policy, Telecommunications, and Fraud at the National Consumers League (NCL).
“The DOJ has been eager to enforce the nation’s antitrust laws,” said Breyault. The NCL is a consumer advocacy organization founded in 1899, and its view is Live Nation and Ticketmaster have been stonewalling the DOJ for more than a decade. The frustrated department may be launching a legal action that would compel the companies to turn over the information DOJ officials want.
Live Nation and Ticketmaster insist they’re not violating any antitrust laws. In early March, Dan Wall, Live Nation’s executive vice president for Corporate and Regulatory Affairs, authored a lengthy blog post laying out the reasons his company is not a monopoly. According to Wall, the reason for high ticket prices and surcharges is the artists looking for more revenue, not the ticket sellers.
“Ticketmaster and other ‘primary ticketing companies’ provide the technology and services that venues need to manage and market shows, sell tickets, and validate tickets for entry,” Wall wrote. “The chosen ticketing company then interfaces with consumers on online marketplaces, not to sell inventory of their own, but as agents of the venues selling tickets priced by performers and production entities. Fans tend not to understand that. They think of Ticketmaster as an enormous ticket retailer that acquires vast quantities of tickets and puts them up for sale at prices Ticketmaster determines – an assumption that makes it easy to blame Ticketmaster for high ticket prices.”
He also wrote that the venues take home most of the service fees, with Ticketmaster and other primary ticketing companies collecting just two to seven percent of the overall cost.
When Live Nation or Ticketmaster acts as a promoter, they’re still not setting ticket prices – that’s up to the artist, Wall wrote.
“Nowadays, it’s common for top artists to get 90 percent or more of the net ticket revenues,” according to Wall. “The promoter gets only what remains after the guarantee, other show costs, and the artist’s percentage has been paid out. … To further complicate things, every deal is different, and artists vary widely by their popularity and bargaining power.”
If Wall sounds defensive, he should, says Diana Moss, director of Competition Policy at the Progressive Policy Institute.
“They’re a monopoly that’s been stifling competition for the better part of 15 years,” she said, adding that the post strikes her as an attempt to communicate to the DOJ how difficult it will be to prevail in such a case.
“The standards of proof are huge,” she said.
And cases like these often come down to testimony and corroborating evidence from third parties. That’s a big ask for people doing business with Live Nation, Moss added. Music acts, artists, venues, and any other individual or company who must work with Live Nation or Ticketmaster for their livelihood would rightly be concerned to speak out against the behemoth. Going on the record and being deposed about the company’s behavior and alleged strong-arm tactics is a risky move.
“The ‘fear factor’ is sky high,” she said. “The artists keep their heads down because they fear retaliation. The smaller and independent venues have also kept their heads down. The government can only bring a case if they have enough to go on. Live Nation knows this.”
As to where the government may be in bringing a case, that remains to be seen.
Breyault said including political considerations about former President Donald Trump’s connections to the entertainment industry could be a factor in whether to sue Live Nation and Ticketmaster.
“Ultimately, the leadership at DOJ has to make a decision on whether they want to file a case or not,” he said. “They’ve been investigation Live Nation for quite a while, but do they have the evidence to win in court?”
