Evaluating the DOJ Case Against Live Nation and Ticketmaster
On May 23, 2024, the U.S. Department of Justice (DOJ) Antitrust Division, along with 30 state attorneys general and local district attorneys, filed a complaint against Live Nation Entertainment and its subsidiary Ticketmaster, accusing them of illegally monopolizing several connected markets in the live-entertainment industry. Moreover, the complaint alleges that Live Nation has repeatedly used its market power in these intertwined markets to exclude competition, thereby harming consumers, artists, and venues through higher prices and poorer-quality service.
To the surprise of no one who has ever bought concert or sporting-event tickets, the DOJ’s evidence is compelling enough that even a skeptic of the Biden administration’s overall approach to antitrust could be persuaded that Live Nation has been acting well outside the boundaries of current antitrust law.
Background
In 2009, Live Nation, the nation’s largest concert- and event-promotion company, proposed to merge with Ticketmaster, then already the nation’s largest primary ticket seller. Given the dominating share that each company had achieved in their respective markets, this merger attracted intense scrutiny from antitrust enforcers, and the DOJ found sufficient cause for concern that they forced the two companies into a consent decree in exchange for allowing the merger to proceed. Among other requirements, this decree stipulated that the merging parties could not force venues into using Ticketmaster’s services as a condition for access to Live Nation artists and events and that they would not retaliate against venues for contracting with rival entertainment companies.
However, according to the DOJ’s 2024 complaint, the newly merged entertainment conglomerate consistently engaged in precisely these sorts of coercive behaviors over the ensuing decade and a half. Indeed, by 2020, with the original consent decree set to expire, the DOJ took the unusual step of extending the decree through 2025. In the Department’s words, the companies’ “violations have so permeated the industry that venues now fear retaliation […] from Live Nation as a matter of course if they do not contract with Ticketmaster.”
Establishing the Illegal Abuse of Market Power
What gives the Live Nation/Ticketmaster conglomerate such a unique ability to coerce artists and venues into submission is that, in the blunt words of the DOJ, it has “its tentacles in virtually every aspect of the live entertainment industry.” This includes not only primary ticket sales and event promotion, but also increasingly the ownership of the venues themselves, especially the large arena and amphitheater venues that can house the biggest and most profitable acts. Live Nation also handles the management of more than 400 artists and provides promotion for nearly 7,000. Collectively, this leverage helps Live Nation/Ticketmaster convince venues they don’t already own to sign exclusive booking deals even if all they want to do is to sell tickets on Ticketmaster.
As one Rutgers law professor noted, whether this sort of tying of services was a result of coercion can often be difficult to prove, but “[t]his case is different because we have the receipts.” Specifically, some of the DOJ’s most incriminating evidence includes emails between the CEOs of Live Nation and the venue-management company Oak View Group, which appear to show that Oak View was willing to avoid directly competing with Live Nation and even to serve as something of an enforcer that pushed the management company’s venues into exclusive deals with Ticketmaster.
The DOJ presents further evidence in its complaint that other such arrangements exist through which Live Nation can deliver similarly threatening warnings via intermediaries. Because of Live Nation’s management of many of the most profitable venues and as well as many of the highest-grossing touring artists, the DOJ alleges that Live Nation can strong-arm uncooperative parties because it has the power, “to move shows to less desirable and less lucrative dates, curtail promotional efforts, and force venues to disable secondary ticketing on non-Ticketmaster platforms”—or, at the limit, to deny venues access to top artists entirely. In fact, in its memorandum to extend the 2010 consent decree, the DOJ documented numerous flagrant instances in which Live Nation made such threats in its negotiations with entertainment venues.
The other key factor that sets the Live Nation/Ticketmaster case apart from many other recent antitrust cases is the clear, demonstrable harm that their market power poses to consumers (as opposed to just harming competitors) in the form of both prices and product quality. As the DOJ complaint noted, even before it merged with Live Nation, Ticketmaster frequently started agreeing to pass venue fees directly along to consumers in exchange for long-term, exclusive ticketing contacts with those venues. Because consumers typically had no other means of obtaining a ticket to their desired show, they had to endure these fees, however high they were. Every frequent concert-goer is familiar with the pain of seeing their ticket price increase, sometimes by 50 percent or more, at checkout because of these surcharges, which the DOJ alleges are higher for U.S. fans than they are for fans in other countries.
Harms to Consumers
The DOJ’s other significant allegation of consumer harm is that Live Nation’s ability to halt the growth of competition has blocked service-enhancing policies and innovation in the live-events industry. This contention has been bolstered by real-world failures like the November 2022 nightmare some fans encountered while attempting to purchase tickets to Taylor Swift’s Eras Tour. Faced with a tremendous volume of demand on the release dates of the tickets, Ticketmaster’s site frequently crashed, while also producing highly frustrating outcomes, such as customers being held in an online queue for hours, having their selected seats removed from their cart at the final stage of checkout because another user (or bot) completed the transaction more quickly, or being unable to purchase tickets during the general sale because they were all sold during a pre-sale.
To be fair, it is difficult to know whether any potential U.S. ticketing competitor could have avoided the issues arising from the extraordinary demand that this tour generated for a finite quantity of tickets. However, the incident did highlight questions that the DOJ antitrust investigation—which was already underway before the Eras debacle—had been asking. Given these embarrassing technical and logistical flaws, would venues really be willing to sign and re-sign 10-year exclusive contracts with Ticketmaster if they felt they had a real choice in the matter? Would artists like Taylor Swift use Ticketmaster if not for Live Nation’s control of a majority of the venues they play in? These and similar questions are among the issues that the DOJ is looking to answer.
Fixing the Problem Is Harder than It Sounds
As the above suggests, establishing that Ticketmaster has been able to leverage market power to the detriment of consumers is relatively straightforward; the difficult part is finding a solution. The DOJ’s request for relief includes a direct recommendation that Live Nation be forced to divest itself of Ticketmaster, “along with any additional relief as needed to cure any anticompetitive harm.” Although the outright breaking up of companies is, for good reason, regarded as an extreme solution, the fact that the merged companies have been found in repeated, and sometimes flagrant, defiance of the consent decree that they had expressly agreed to in 2010 does suggest that ordinary behavioral remedies may not suffice to curb their actions in the future.
Despite Live Nation/Ticketmaster’s problematic practices, vertical integration (owning control over multiple stages in the product-delivery process) is not inherently harmful or anticompetitive, as firms providing a suite of integrated services can often create efficiencies and convenience that benefits consumers. The problem here is not merely that Live Nation possesses significant market power at multiple stages in the process of delivering consumer-focused entertainment, but rather how the company has deliberately leveraged that position to deny competitors the space needed to operate. Similarly, even exclusive contracts with venues are not necessarily problematic if the service provider’s product is so superior that signing such contracts results in benefits to consumers that counterbalance the harm such contracts may cause to competition.
Thus, the DOJ ought to be careful, as it considers how to rectify Live Nation’s abuses and focus on ways to constrain the company’s ability to force artists and venues into compliance without establishing any concerning precedents that might constrain otherwise normal and appropriate contractual business dealings. It is also true that the problem may not indicate a need for new remedies as much as it suggests a failure to enforce existing proscriptions, as many of Live Nation’s questionable practices occurred despite explicit prohibitions and implied oversight previously imposed by the DOJ. Nevertheless, if the accusations presented by the DOJ stand up to court scrutiny, it may be justifiable to limit the duration and terms of both Live Nation’s and Ticketmaster’s contracts with venues.
Finally, concert lovers who hope that breaking up Live Nation will put an end to negative ticket-purchasing experiences should temper their expectations. Although allowing other companies a fairer shot at competing for live-event ticketing and promotion might well spark service-enhancing innovations, somewhat reduce ticket prices, and improve the ticket-purchasing experience overall, it is likely not a panacea. Ticketmaster is not solely to blame for surging ticket prices and the rising fees that accompany them. In fact, the base costs of tickets themselves, especially on the secondary market, are a function of supply and demand. So, as long as there are more fans for a particular artist or other entertainment offering than the finite number of seats at these popular events, prices will continue to remain high until events are sold out or supply exceeds demand.
Nevertheless, the fact that Live Nation and Ticketmaster can get away with bullying venues into contracts that appear detrimental to consumers suggests that some antitrust intervention is warranted in this market. It will be up to the DOJ and the courts to determine what, if any, remedies might be available that are suitable and likely to be effective to foster competition and innovation in the live entertainment industry.