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July 29, 2024
In a landmark move to address monopolistic practices in the live entertainment sector, the Department of Justice (DOJ), in collaboration with 30 state and district attorneys general – including Wisconsin Attorney General Josh Kaul – has filed a civil antitrust lawsuit against Live Nation Entertainment Inc. and its wholly-owned subsidiary, Ticketmaster LLC.
The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges Live Nation-Ticketmaster has created a monopoly that stifles competition, leading to higher prices and fewer choices for consumers, artists and venues.
The core allegations
The justice department’s complaint accuses Live Nation-Ticketmaster of violating Section 2 of the Sherman Act by unlawfully maintaining monopolies in several concert promotions and primary ticketing markets.
According to the complaint, the company’s exclusionary practices have fortified its market dominance, limiting the entry and expansion of its rivals.
This conduct, the lawsuit alleges, harms fans by depriving them of ticketing innovation and forcing them to pay more for tickets than they would in a competitive market.
Attorney General Merrick B. Garland emphasized the effects of Live Nation-Ticketmaster’s monopoly, stating, “We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters and venue operators.”
Merger of Live Nation and Ticketmaster
Interestingly, the merger of Live Nation and Ticketmaster was itself approved by the Department of Justice in 2010, which cleared the way for the world’s largest concert promoter and venue operator to combine with the world’s largest ticket provider.
At that time, the DOJ’s approval was conditional on Ticketmaster subjecting itself to anti-retaliation provisions and licensing its ticketing software, to protect competition for primary ticketing.
Despite the DOJ’s intentions to protect competition in 2010, Ticketmaster now controls more than 80% of the market for primary ticket sales in the country.
This market control is largely attributed to the exclusive ticketing contracts Ticketmaster has with the nation’s largest venues and its ability to leverage Live Nations’ control over artist contracts and live venue management.
The impact on fans
The monopolistic practices of Live Nation-Ticketmaster have had widespread repercussions. The high-profile disaster related to ticket sales for Taylor Swift’s 2023 Eras Tour brought significant attention to the issue and resulted in congressional hearings.
Fans faced numerous problems while trying to purchase tickets, highlighting the inadequacies and control exerted by Ticketmaster.
This incident, among others, has led to increased scrutiny from both state attorney generals and Congress.
Ticket prices have surged, driven by a combination of high demand, post-COVID-19 pandemic and Live Nation’s market control.
In 2023, ticket prices for the top 100 tours averaged $122.84, a 17% increase from the previous year.
Service fees and ticket resales further inflate these costs, sometimes reaching thousands of dollars for in-demand artists, such as Taylor Swift.
The broader legal context
The lawsuit against Live Nation-Ticketmaster is part of a broader effort by the DOJ to combat corporate monopolies.
Similar actions have recently been taken against tech giants like Apple, Google and Amazon.
The justice department’s aggressive antitrust enforcement aims to dismantle monopolies that box out competitors and drive up prices for consumers.
The justice department is signaling to large corporations across multiple industries that monopolistic practices will not be tolerated.
For Wisconsin businesses and consumers, this broader push for antitrust enforcement could result in lower prices and more choices, not just in entertainment but in other sectors as well.
Potential outcomes, future implications
If successful, the lawsuit could lead to the breakup of Live Nation-Ticketmaster, significantly reshaping the live event industry.
Such an outcome could potentially lower ticket prices, increase competition and provide more opportunities for smaller promoters and independent venues.
However, the legal process is expected to be lengthy, with years of trials and potential appeals ahead.
In addition to the DOJ lawsuit, legislative efforts are also underway to increase transparency in ticket pricing.
The TICKET Act, recently passed by the House of Representatives, aims to force ticket sellers to list all costs and fees upfront, helping consumers make more informed purchasing decisions and enhancing protections against fraud and excessive fees.
The ticket forward
The justice department’s lawsuit against Live Nation-Ticketmaster marks a critical step toward restoring competition in the live entertainment industry.
Though the legal battle will be protracted, the potential benefits for fans, artists and independent promoters are significant.
Wisconsin’s involvement in the lawsuit underscores the widespread concerns over the negative implications of monopolistic practices on consumers within the state.
As the case unfolds, it is sure to be closely watched by all stakeholders in the live event ecosystem, from music lovers to venue operators.
