Towhey: Is DOJ close to suit v. Live Nation/Ticketmaster?
The Justice Department has opened an investigation into claims that Live Nation and Ticketmaster are violating antitrust laws and will be filing a lawsuit soon.
Maybe.
Justice won’t comment on an open investigation, but The Wall Street Journal and Bloomberg have both reported the department will be filing a lawsuit this month 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 Justice’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.”
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, wrote 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 2% to 7% of the overall cost.
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.
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.
“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.
Jessica Towhey writes on education and energy policy for InsideSources.com.