Concert-Goers Don’t Want To Play Monopoly

When Ticketmaster merged with Live Nation in 2010 to form Live Nation Entertainment (LNE), the primary objective was to enhance the live entertainment experience and spearhead significant advancements in ticketing technology, marketing strategies, and customer service. ¹[1]Relationship between Live Nation and Ticketmaster, TICKETMASTER (Oct. 10, 2023, 5:40 PM), https://help.ticketmaster.com/hc/en-us/articles/9760117678993-Relationship-between-Live-Nation-and-Ticketmaster. However, in 2022, Taylor Swift fans called for the breakup of LNE following issues during ticket sales for “The Eras Tour.”²[2]Emily Lorsch, Why Live Nation and Ticketmaster dominate the live entertainment industry, CNBC (Jan. 25, 2023, 11:32 AM), https://www.cnbc.com/2023/01/25/the-live-nation-and-ticketmaster-monopoly-of-live-entertainment.html. The “Swifties” voiced concerns about ticket prices, unscrupulous ticket scalpers, and overall competition within the market.³[3]Id. These concerns led to the filing of two separate class action lawsuits against LNE, one of which is still pending in California federal court, while the other was dropped at the end of 2023.⁴[4]Bill Donahue, Taylor Swift Fan Drops Class Action Against Live Nation Over Eras Tour Ticket Debacle, BILLBOARD (Dec. 13, 2023), https://www.billboard.com/business/legal/taylor-swift-fan-class-action-live-nation-eras-tour-dropped-1235554526/. The filings shed light on investigations exploring the ramifications of the merger, prompting lawmakers to consider the potential impact of a successful antitrust lawsuit.⁵[5]Id.

How The Game Board Was Created

When Live Nation completed its acquisition of Ticketmaster, it solidified its grip on an estimated 70 percent of the ticketing and live event venues market.⁶[6]Emily Lorsch, Why Live Nation and Ticketmaster dominate the live entertainment industry, CNBC (Jan. 25, 2023, 11:32 AM), https://www.cnbc.com/2023/01/25/the-live-nation-and-ticketmaster-monopoly-of-live-entertainment.html The merger marked the convergence of two prominent entities in the live music production continuum: Live Nation, which is involved in concert promotion, venue management, and self-ticketing, and Ticketmaster, which primarily focuses on ticketing services and artist management.⁷[7]Id.

In terms of antitrust law, the Department of Justice (DOJ) stated that the merger represented both “horizontal integration,” indicating the consolidation of two direct rivals, and “vertical integration,” as key components of the companies involved were interconnected in the supply chain, with some managing aspects above and others below.⁸[8]Press Release, U.S. Dep’t. of Just., The TicketMaster/Live Nation Merger Review And Consent Decree In Perspective (Mar. 18, 2010), https://www.justice.gov/atr/speech/ticketmasterlive-nation-merger-review-and-consent-decree-perspective.. Therefore, the DOJ acknowledged that while Ticketmaster and Live Nation excelled in different aspects of the live music industry, Live Nation’s expansion into ticketing could potentially bolster Ticketmaster’s dominance in primary ticketing, thereby posing a threat to competition.⁹[9]Id.

Even so, the DOJ approved the merger with the condition of a consent decree, which serves as an agreement with a set of conditions between the DOJ and the involved parties.¹⁰[10]Id. The final agreement, spanning ten years, contained provisions that prohibited the company from threatening or retaliating against concert venues that opted to use a different ticketing company.¹¹[11]Press Release, U.S. Dep’t. of Just., Justice Department Will Move to Significantly Modify and Extend Consent Decree with Live Nation/Ticketmaster (Mar. 18, 2010), https://www.justice.gov/opa/pr/justice-department-will-move-significantly-modify-and-extend-consent-decree-live. These provisions were designed by the DOJ to prevent particular practices and forms of vertical integration that could impede new competitors from entering the market and hinder competition from existing rivals.¹²[12]Id. Furthermore, Ticketmaster divested one of its subsidiaries, a separate ticketing company, to a competing firm, and committed to licensing its ticketing software to another competitor known as AEG, a major promoter and rival of Live Nation.¹³[13]Nilay Patel, Taylor Swift vs. Ronald Reagan: the Ticketmaster story, THE VERGE (Mar. 21, 2023, 10:00 AM), https://www.theverge.com/23645057/taylor-swift-ticketmaster-eras-tour-beyonce-antitrust-monopoly-reagan-senate-hearing-congress.

The Rules to Follow

In 2019, the DOJ revisited the consent decree and investigated LNE to determine whether they violated it by exerting pressure on concert venues to adopt Ticketmaster’s services.¹⁴[14]Julia Boorstin & Elly Cosgrove, Live Nation, DOJ reach deal over ticketing practices, stock jumps 9%, CNBC (Dec. 12, 2019, 1:52 PM), https://www.cnbc.com/2019/12/19/live-nation-justice-department-to-announce-a-settlement-over-ticketing-practices-a-source-says.html. In response to what the DOJ viewed as repeated violations over the years, they clarified the conditions and extended the term of their 2010 agreement for an additional five and a half years.¹⁵[15]Id. These changes were implemented to hopefully simplify future detection and enforcement of potential violations.¹⁶[16]Id. The redefined agreement for LNE included the following terms:

• Threatening or withholding concerts from venues choosing a ticketer other than Ticketmaster (both threats and actual actions) will qualify as a violation
• The DOJ will assign an independent monitor to oversee LNE’s compliance
• LNE will appoint an internal antitrust compliance officer to train employees and ensure compliance
• LNE must inform all venue customers about the clarified merger agreements, especially regarding ticketing
• Any future violations will incur a $1 million penalty
• LNE will pay for the DOJ’s investigation and enforcement action ¹⁷[17]Id.

The amended consent decree, now extended until 2025, was in place for the Era’s Tour sale.¹⁸[18]Marc Hogan, Meet the Taylor Swift Fan Taking Live Nation and Ticketmaster to Court, THE PITCH (Aug. 3, 2023), https://pitchfork.com/thepitch/taylor-swift-fan-ticketmaster-lawsuit-interview/.

The New Players

The two class-action lawsuits filed in December in California highlight allegations of monopolization against LNE, undermining the notion that the prior consent decree was enough to keep competition. ¹⁹[19]Scott Andrzejewski, Antitrust Complaints Filed Against Ticketmaster and Live Nation in California: An Overview and Analysis, The University of Chicago Business Law Review (November 17, 2023, 4:00PM), https://businesslawreview.uchicago.edu/online-archive/antitrust-complaints-filed-against-ticketmaster-and-live-nation-california-overview.The dismissed complaint, filed in the Central District of California, was similar to the standing complaint, which was filed in LA County, featuring 26 plaintiffs from thirteen states contesting various claims regarding Ticketmaster’s dominance.²⁰[20]Id. In the standing complaint, one claim suggests Ticketmaster has exclusive agreements with stadiums hosting Swift’s tour, venues that are the only viable option for large concerts. ²¹[21]Jennifer Corn, Ramishah Maruf, & Camila Bernal, Taylor Swift fans take Ticketmaster to court over Eras Tour ticketing chaos, CNN (Mar. 27, 2023, 1:30 PM), https://www.cnn.com/2023/03/27/media/taylor-swift-ticketmaster-court/index.html.This compels artists like Swift to collaborate with Ticketmaster, raising questions about LNE’s influence over venues, and consequently, the majority of major concert ticket sales in California and the US go through its platform.²²[22]Id. Additionally, Ticketmaster’s dynamic pricing model reportedly raises prices as ticket availability decreases, disadvantaging late buyers. ²³[23]Id.The complaint also suggests Ticketmaster allows scalpers access to tickets, leading to inflated resale prices and potential price discrimination law violations.²⁴[24]Id. Consequently, Ticketmaster’s control extends to the secondary market, as scalpers are restricted to its platform, allowing the company to allegedly dictate resale prices and stifle competition.²⁵[25]Id.

Overall, the complaints allege consumer harm resulting from this dominance. Consequently, when the “Swifties” filed their class action lawsuits against LNE, the DOJ announced that it had opened an antitrust investigation into the company to determine its compliance with the amended consent decree.²⁶[26]David McCabe & Ben Sisario, Justice Dept. Is Said to Investigate Ticketmaster’s Parent Company, THE N.Y. TIMES (Nov. 18, 2022), https://www.nytimes.com/2022/11/18/technology/live-nation-ticketmaster-investigation-taylor-swift.html. Members of the DOJ’s antitrust division have reached out to music venues and other stakeholders in the ticket market to investigate LNE’s practices.²⁷[27]Id. While a definitive decision has not yet been reached, the DOJ is still investigating and could potentially file a case later this year.²⁸[28]Kanjyik Ghosh, DOJ seeks new information from Live Nation in antitrust probe – Bloomberg News, REUTERS (February 5, 2024, 7:43PM), https://www.reuters.com/business/doj-seeks-new-information-live-nation-antitrust-probe-bloomberg-news-2024-02-06/. In a related government action, the Senate conducted a hearing in January 2023 regarding ticketing industry competition.²⁹[29]Ben Sisario, Senate Hearing on Ticketmaster, THE N.Y. TIMES (Jan. 24, 2023), https://www.nytimes.com/live/2023/01/24/arts/ticketmaster-taylor-swift. Senators criticized LNE for its lack of transparency and its inability to prevent automated bot purchases of tickets, to the extent that they even labeled LNE as a monopoly.³⁰[30]Id. Despite the allegations of anticompetitive behavior, LNE consistently denies being a monopoly.³¹[31]Id.

The Object of The Game

While LNE arguably wields a monopoly on the industry, having a monopoly itself is not illegal in the United States. ³²[32]Id. It is the abuse of a monopoly position through improper conduct and a lack of competition that raises legal concerns.³³[33]Id. Diana Moss, president of the American Antitrust Institute, has explained that allowing monopolies to exist is not inherently problematic; it is when these monopolies harm competition and stifle innovation that issues arise.³⁴[34]Diana Moss, Busting the Live Nation-Ticketmaster Monopoly: What Would a Break-Up Remedy Look Like?, AMERICAN ANTITRUST INSTITUTE (Jul. 11, 2023), https://www.antitrustinstitute.org/work-product/busting-the-live-nation-ticketmaster-monopoly-what-would-a-break-up-remedy-look-like/.

For example, antitrust regulations do not penalize prosperous companies solely for their success.³⁵[35]Id. A business can rightfully dominate its market by offering a superior product, and in such cases, competitors may indeed face genuine disadvantages if their products or services do not measure up in comparison.³⁶[36]Id. Nonetheless, a monopoly is deemed illegal when it engages in improper conduct, such as the behaviors listed in Swift’s fans’ complaints, alleging harmful price discrimination and venue pressure against Ticketmaster.³⁷[37]Id.

What’s the Next Play?

As stated, one of the class action lawsuits was voluntarily dismissed in December.³⁸[38]Jon Bilstein, Taylor Swift Fans Drop Live Nation Class Action Suit Over Eras Tour Ticketing Fiasco, ROLLINGSTONE (Dec. 13, 2023), https://www.rollingstone.com/music/music-news/taylor-swift-fans-drop-live-nation-lawsuit-eras-tour-tickets-1234927063/. Before this, both sides had agreed to continue settlement discussions through mediation, though it’s unclear whether a settlement was ever reached.³⁹[39]Id. While the other class action and DOJ investigation is ongoing, the Senate has moved to introduce a bill, called the Fans First Act, which promises consumer protection in the live entertainment industry.⁴⁰[40]Ben Sisario, Senate Introduces Long-Awaited Bill Promising Changes for Ticket Buying, THE NEW YORK TIMES (Dec. 8, 2023), https://www.nytimes.com/2023/12/08/arts/music/fans-first-act-ticket-bill.html. The bipartisan bill aims to provide transparent pricing by disclosing all fees upfront, specifying seat or section details, and distinguishing between original sellers and resellers.⁴¹[41]Id. Aimed at addressing soaring ticket prices and questionable selling practices, the proposed law underscores a commitment to concert-goers, including those involved in the class-action lawsuits.⁴²[42]Id. The bill garners widespread support across the music industry, including Live Nation, who calls for government action to reform the ticket market.⁴³[43]Id.

Therefore, while Swift’s fans await developments in their lawsuit and updates on the DOJ’s investigation into LNE, other stakeholders are scrutinizing the live entertainment gameboard, striving to ensure that access to live music remains inclusive and not limited to a privileged few.

Written by: Raegan Brizek
Raegan is a 2L at Brooklyn Law School.