DOJ sues to split up Ticketmaster and Live Nation, alleges “monopolistic control”

WASHINGTON (AP) — The Justice Division sued Ticketmaster and its mother or father firm Thursday, accusing them of working an unlawful monopoly over stay occasions in America and asking a court docket to interrupt up the system that squelches competitors and drives up costs for followers.

Filed in federal court docket in Manhattan, the sweeping antitrust lawsuit was introduced with 30 state and district attorneys basic and seeks to dismantle the monopoly they are saying is squeezing out smaller promoters, hurting artists and drowning ticket consumers in charges. Ticketmaster and its proprietor, Reside Nation Leisure, have an extended historical past of clashes with main artists and their followers, together with Taylor Swift and Bruce Springsteen.

“It’s time for followers and artists to cease paying the value for Reside Nation’s monopoly,” Lawyer Common Merrick Garland mentioned. “It’s time to restore competitors and innovation within the leisure trade. It’s time to break up Reside Nation-Ticketmaster.”

The federal government accused Reside Nation of ways — together with threats and retaliation — that Garland mentioned have allowed the leisure big to “suffocate the competitors” by controlling nearly each side of the trade, from live performance promotion to ticketing. The affect is seen in an “countless listing of charges on followers,” the legal professional basic mentioned.

“Reside music shouldn’t be out there solely to those that can afford to pay the Ticketmaster tax,” mentioned Assistant Lawyer Common Jonathan Kanter of the Justice Division’s Antitrust Division.

Ricky Palitti and Jacob DeLong of Detroit mentioned they just lately spent about $1,200 for 3 tickets to a Shania Twain live performance utilizing Ticketmaster and about $370 to see RuPaul’s Drag Race Reside.

“I feel tickets have undoubtedly gone up in worth, however I additionally suppose that every one the completely different charges that Ticketmaster locations on an order undoubtedly hikes the value up, for certain,” Palitti mentioned.

DeLong mentioned that whereas he respects an artist’s work, the added charges make the prices to see a present “ridiculous.”

“The place can we get a break?” he mentioned.

Reside Nation, which has for years denied that it’s violating antitrust legal guidelines, mentioned the lawsuit “gained’t clear up the problems followers care about regarding ticket costs, service charges and entry to in-demand reveals.”

“Calling Ticketmaster a monopoly could also be a PR win for the DOJ within the quick time period, however it’ll lose in court docket as a result of it ignores the fundamental economics of stay leisure,” Reside Nation added. It mentioned most service charges go to venues and that exterior competitors has ”steadily eroded” Ticketmaster’s market share. The corporate mentioned it could defend itself in opposition to the “baseless allegations.”

The Justice Division mentioned Reside Nation’s anti-competitive practices embrace utilizing long-term contracts to maintain venues from selecting rivals, blocking venues from utilizing a number of ticket sellers and threatening venues that they might lose cash in the event that they don’t select Ticketmaster.

In 2021, the live performance big threatened to financially retaliate in opposition to a agency if one among its portfolio firms didn’t cease competing with Reside Nation for artist promotion contracts, the Justice Division alleged. Reside Nation has additionally scooped up smaller promoters it seen as a threats, officers mentioned.

Michael Provider, a professor at Rutgers Regulation Faculty who focuses on antitrust litigation, mentioned the Justice Division has a robust case. He expects Reside Nation to “attempt to forged blame elsewhere,” similar to arguing that costs are set by artists or venues, however he mentioned these explanations are weak.

“The DOJ confirmed how Reside Nation actually has its tentacles in every aspect of the availability chain, which implies that it has much more management than it’s letting on,” he mentioned. “And, by way of justifications, there may be actually little or no that (Reside Nation) can provide by way of how they’re serving to the buyer.”

The grievance mentioned a breakup between Reside Nation and Ticketmaster is on the desk. That, mixed with different treatments similar to stopping some unique offers that shackle competitors, might probably assist followers see decrease ticket costs, give artists extra company in selecting venues and enhance smaller promoters’ success in the long term, Provider mentioned.

Ticketmaster, which merged with Reside Nation in 2010, is the world’s largest ticket vendor throughout stay music, sports activities, theater and extra. Throughout its annual report final month, the corporate mentioned Ticketmaster distributed greater than 620 million tickets via its methods in 2023.

Round 70% of tickets for main live performance venues within the U.S. are bought via Ticketmaster, in accordance with information in a federal lawsuit filed by shoppers in 2022. The corporate owns or controls greater than 265 of North America’s live performance venues and dozens of high amphitheaters, in accordance with the Justice Division.

Reside Nation’s footprint has grown considerably over the previous 10 years, in accordance with the corporate’s annual monetary reviews. Between the top of 2014 and the top of 2023, Reside Nation reported a worldwide enhance of greater than 136% by way of venues the corporate “owned, leased, operated, had unique reserving rights for or had an fairness curiosity over which we had a big affect.”

The ticket vendor sparked outrage in November 2022 when its web site crashed throughout a presale occasion for a Taylor Swift stadium tour. The corporate mentioned the positioning was overwhelmed by each followers and assaults from bots, which have been posing as shoppers to scoop up tickets and promote them on secondary websites. The debacle prompted congressional hearings and payments in state legislatures geared toward higher defending shoppers.

The Justice Division allowed Reside Nation and Ticketmaster to merge so long as Reside Nation agreed to not retaliate in opposition to live performance venues for utilizing different ticket firms for 10 years. In 2019, the division investigated and located that Reside Nation had repeatedly violated that settlement. The federal government then prolonged the prohibition on retaliating in opposition to live performance venues to 2025.

“It’s a failure of previous antitrust. And it’s one thing that rips clients off daily,” mentioned John Kwoka, a professor of economics at Northeastern College who was additionally a marketing consultant for the states that ran a 2009 investigation in parallel with the Justice Division into Reside Nation and Ticketmaster’s unique merger.

Kwoka, who’s amongst those that have lengthy advocated for a breakup, notes that Reside Nation and Ticketmaster have remained “largely unchecked” over the past 15 years.

Ticketmaster’s clashes with artists and followers date again three a long time. Pearl Jam took goal on the firm in 1994, years earlier than the Reside Nation merger, though the Justice Division in the end declined to convey a case. Extra just lately, Bruce Springsteen followers have been enraged over excessive ticket prices due to the platform’s dynamic pricing system.

Reside Nation has maintained that artists and groups set costs and determine how tickets are bought. The corporate’s government vice chairman of company and regulatory affairs, Dan Wall, mentioned in a press release Thursday that elements similar to growing manufacturing prices, artist reputation and on-line ticket scalping are “truly liable for greater ticket costs.”

The Justice Division lawsuit filed Thursday is the most recent instance of the Biden administration’s aggressive antitrust enforcement. The hassle has focused firms accused of participating in unlawful monopolies that field out opponents and drive up costs. In March, the Justice Division filed a lawsuit in opposition to Apple alleging that the tech big has monopoly energy in the smartphone market. The Democratic administration has additionally taken on Google, Amazon and different tech giants.

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Grantham-Philips reported from New York. Related Press reporters Michelle Chapman and Maria Sherman in New York, Christopher L. Keller in Albuquerque, New Mexico, and video journalist Ty O’Neil in Las Vegas contributed.