Justice Department sues Live Nation, seeks breakup
(The Center Square) – The federal government wants to force the divorce of Live Nation and Ticketmaster more than a decade after it allowed the entertainment giants to merge.
“It is time to break it up,” U.S. Attorney General Merrick Garland said Thursday.
The U.S. Department of Justice, along with 30 state and district attorneys general, filed a civil antitrust lawsuit against Live Nation Entertainment Inc. and its wholly-owned subsidiary, Ticketmaster LLC, alleging the entertainment company used its ticketing monopoly to “suffocate” the competition.
The suit alleges the monopoly and other unlawful business practices thwart competition. The suit seeks changes to the company’s business practices, including by asking a judge to effectively undo the 2010 merger of Live Nation and Ticketmaster.
The complaint, filed Thursday in the U.S. District Court for the Southern District of New York, alleges that Live Nation-Ticketmaster unlawfully exercises its monopoly power in violation of the Sherman Act.
“As a result of its conduct, music fans in the United States are deprived of ticketing innovation and forced to use outdated technology while paying more for tickets than fans in other countries,” according to the Justice Department. “At the same time, Live Nation-Ticketmaster exercises its power over performers, venues, and independent promoters in ways that harm competition. Live Nation-Ticketmaster also imposes barriers to competition that limit the entry and expansion of its rivals.”
Garland said the company illegally drives up ticket prices.
“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,” Garland said during a news conference. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”
In March, amid criticism, Live Nation defended its practices and said teams and artists set ticket prices.
“The real explanations for high ticket prices are well-understood and have very little to do with Live Nation or Ticketmaster,” Live Nation Entertainment Inc. Executive Vice President Dan Wall wrote in a post. “They begin with the economic conditions that explain most pricing: supply and demand. … Statements to the effect that Live Nation and Ticketmaster ‘keep ticket prices high’ are just flat wrong. Anyone with a basic understanding of the industry knows this. Those who perpetuate this falsehood are cynical at best. They do a disservice to consumers and to rational political discourse.”
On Thursday, Wall said the Justice Department bowed to political pressure in filing the lawsuit.
“The complaint – and even more so the press conference announcing it – attempt to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry,” Wall wrote. “It blames concert promoters and ticketing companies – neither of which control ticket prices – for high ticket prices. It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost. It blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees.”
