Buying concert tickets is a drag, as Taylor Swift fans know all too well.
When tickets first went on sale for his much-anticipated Eras tour in November 2022, fans suffered hours of queues and frozen screens before Ticketmaster’s website finally crashed. Many fail to collect tickets, which end up being sold on the secondary market for as much as they cost $11,000.
In the wake of that failure, the Justice Department opened an investigation into Ticketmaster’s parent company, Live Nation Entertainment. Thursday, it is filed a lawsuit Live is trying to dismantle Nation, accusing it of operating as an illegal monopoly through anti-competitive behavior that harmed everyone from consumers to artists.
“It’s time to dismantle it,” Attorney General Merrick Garland said at a news conference Thursday.
The lawsuit claims that Live Nation controls about 60 percent of the market for concert promotions and manages more than 400 artists. Also through Ticketmaster by controlling About 70 percent of the market for ticketing and live events and Major concerts account for more than 80 percent of primary ticketing.
“Artists and fans, as well as countless people and other services that support them, suffer the loss of dynamism and growth that competition will inevitably initiate,” the complaint in New York federal court said.
Live Nation countered in a statement that the lawsuit would do nothing to actually “address the issues fans care about regarding ticket prices, service fees and access to in-demand shows.”
“Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, as the vast majority of service fees go to venues, and competition has steadily eroded Ticketmaster’s market share and profit margins,” the company said. said
This is not the first time Live Nation Entertainment has come under government investigation.
The DOJ allowed Ticketmaster and Live Nation, a venue operator and event promoter, to merge and become a part of Live Nation Entertainment. 2010 settlement. But it would require Ticketmaster to take measures to improve competition, including divesting itself of a ticketing subsidiary and licensing its ticketing software. The DOJ also prohibited Live Nation Entertainment from “retaliating against any venue owner who chooses to use another company’s ticketing services or another company’s promotional services.”
In 2019, the DOJ accused The company violated that requirement and hired an external monitor to keep track of its ongoing compliance.
Critics have argued in the years since that the provisions of the 2010 settlement Never actually stimulated competition In the ticketing market and that Live Nation Entertainment should be separated.
“The Justice Department should never have come clean [Live Nation-Ticketmaster] Consolidation, because as a vertically integrated monopoly, has every interest in encouraging them to raise prices and fees, and there is no [one] In a position to discipline the industry using an alternative promoter or ticketing agent,” said Tim Wu, one The original architect A professor of antitrust policy in the Biden administration and Columbia Law, previously A case was filed.
What are the antitrust concerns surrounding Live Nation Entertainment?
The DOJ must show that Live Nation Entertainment engaged in anti-competitive conduct that stifled competition and harmed consumers by raising prices excessively or offering inferior products.
In the complaint, Live Nation allegedly did this:
- The venue partnered with management firm Oak View Group to sign a long-term deal to use Ticketmaster as their sole ticket vendor.
- By acquiring potential competitors and threatening to retaliate financially against them or the venue that works with them.
- By preventing artists from using Live Nation venues unless they sign up for the company’s promotion service.
Some experts, such as Fiona Scott Morton, a professor at the Yale School of Management and former chief economist for the DOJ’s antitrust division, think the government may have a strong case.
“If we’ve got a specific market and Ticketmaster has a 70 percent share, it’s very likely that they have market power in the way we normally mean it in an antitrust context and they’re going to be able to raise prices or lower quality or otherwise limit options for consumers that they’re competitive with.” At worse terms than it could get in the market,” he said before filing the suit.
At the very least, Live Nation’s promoters — the employees who organize the live events — have an indictment of how they advise artists and negotiate with venues on ticket pricing on sites like Ticketmaster. 78 percent of the top fields nationwide Powered by Live Nation. Those venues deduct a service fee to Ticketmaster. And that should raise alarm bells, says Scott Morton.
The company has already tried to preempt some of these potential complaints. On March Blog postDan Wall, executive vice president of corporate and regulatory affairs for Live Nation Entertainment, argued that neither Ticketmaster nor Live Nation were responsible for the high ticket prices.
Wall wrote that tickets sold on Ticketmaster “are actually determined by the artist and team,” not Ticketmaster itself. But the group of artists may include Live Nation promoters.
Wall also rejects the idea that service charges, which go to venues and ticket companies like Ticketmaster, are a hidden way for Ticketmaster to raise prices.
Service fees vary by venue and event, but average about 27 percent of the price of a ticket, according to the 2018 Government Accountability Office. Report. As part of his fight against “junk fees,” President Joe Biden has criticized ticket retailers for failing to disclose these fees earlier. At Ticketmaster, fees are only visible at checkout.
Wall argues that “Ticketmaster doesn’t set the service charge, the venues do.” But that oversimplifies what’s going on behind the scenes.
When negotiating contracts with ticket companies, venues offer a service fee Ticketing companies, including Ticketmaster, then structure their bids for contracts — including a cut of service fees — based on those proposed fees. However, the proposed service fee “depends on everyone’s outside options in a bargaining game,” Scott Morton said. And for venues, there aren’t many outside options in a market where Ticketmaster controls a large number of ticket sales.
In that sense, venues may want to charge higher service fees so that Ticketmaster, by far the biggest ticket seller, can get a bigger cut and therefore bid on a deal.
“Ticketmaster is pointing to the undeniable power of others to obscure its monopoly role in facilitating phenomenal growth in both fees and, to some extent, ticket prices,” Wu said. Live Nation Entertainment has tried to portray itself as a “passive, almost disinterested player while doing everything it can to encourage price and fee increases and discourage competition,” he added.
Wu pointed song kick For example. In the 2010s, the company attempted to pioneer a direct sales model from artists to fans, “only to find artists facing threats and retaliation from Ticketmaster/LiveNation”.
In his statement, Wall also argues that neither Ticketmaster nor Live Nation is making enough money that they are abusing their market power. Ticketmaster makes about 5 to 7 percent of the average ticket price from this service fee, which it says is below other digital distribution platforms like Airbnb and StubHub, and Live Nation takes about 2 percent of concert revenue.
But the question is whether Ticketmaster should be doing that much, and whether any antitrust moves could improve the ticketing experience for customers. The answer to both remains to be seen.
“It’s trying to use numbers to distract us from what’s really important,” Scott Morton said. “It doesn’t really matter how big Ticketmaster’s revenue is compared to some other arbitrary number — like how much people spend at concerts in America or how much they spend in some other big market — but rather, what that revenue would be in an environment with stronger competition.”
Update, May 23, 2:50 pm: This story, originally published April 16, has been updated with additional information from the DOJ’s lawsuit filed May 23.
