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In late May, the U.S. Department of Justice (DOJ) and 30 states launched a liveThe world’s largest event organizer and its subsidiaries TicketmasterThe case has attracted widespread media coverage as part of U.S. President Joe Biden’s crackdown on monopolistic practices amid anger over failed ticket sales in recent years, including on tour. The era of Taylor Swift.
Most reports focus on the fact that the Justice Department is seeking Break up Live Nation-Ticketmaster, the product of a disastrous merger approved in 2010. But the lawsuit also marks the end of an era in which U.S. antitrust regulators turned a blind eye to the coercion of dominant companies. Just as important, given Live Nation-Ticketmaster’s clout and international reach, a federal victory could reshape the global live entertainment industry.
In recent decades, U.S. antitrust regulators have tended to focus on technical details and rely on legalese. The lawsuit, by contrast, starkly highlights the pernicious effects of corporate dominance and coercion. The government describes Live Nation as an “oppressive” company that has “used its power” to “extend its influence and reach into every corner of the increasingly complex and interconnected (entertainment) ecosystem, eliminating competitors, continuing to raise barriers to entry, and suppressing merit-based competition.”
This is an accurate description: Live Nation makes extensive use of exclusive contracts with venues and artists, which allows the company to exert near-total control over tour schedules and ticket sales. Under those agreements, artists couldn’t sell tickets directly to fans through a presale window or use ticket sellers other than Ticketmaster. As a result, fans paid more and smaller promoters and ticket sellers were displaced, cementing Live Nation’s control over the market.
It doesn’t have to be this way. Before the 1970s, when enforcement of U.S. antitrust laws was limited, courts condemned such contracts as illegal. Yet since Live Nation was founded in 1996, these deals have escaped scrutiny and even been praised. Competition Policy Make it happen Allow Live Nation and others Exercising “irresponsible control” over businesses and artists Beyond the company, to the detriment of consumers, workers, and competitors.
The Live Nation-Ticketmaster lawsuit, along with other recent antitrust cases, reflects the Biden administration’s renewed commitment to redefine the use of exclusionary agreements by dominant companies as harmful business practices rather than fair competition. For example, the Federal Trade Commission’s lawsuit against Amazon for its monopoly in online retail focuses on the company’s exclusionary practices, namely its restrictions on what third-party sellers can do outside of Amazon’s marketplace. Similarly, the Department of Justice’s antitrust lawsuit against Google questions its use of exclusive contracts to maintain its dominance in web search.
U.S. Department of Justice Cases Lessons are provided for other jurisdictions where Live Nation-Ticketmaster operates, particularly in developing countries. Consumers in these countries might initially welcome a well-known company representing a wide range of international artists, but that quickly changed when Live Nation-Ticketmaster began abusing its market power (by raising prices or arbitrarily limiting access to certain shows).
Let’s consider what happened in Mexico. In 2021, Live Nation acquired a 51% stake in OCESA Entertainment, the country’s largest concert promoter, which sells about 20 million tickets per year. In December 2022, Ticketmaster mismanaged ticket sales for Bad Bunny’s concert in Mexico City, which was supposed to be one of the largest concerts in the country’s history. Thousands of valid tickets for the sold-out show were turned away at the venue, and Bad Bunny ended up playing to a half-empty stadium.
been: Ticketmaster apologizes for excluding legitimate tickets to Bad Bunny concert in Mexico
This is not an isolated case. In 2023, Mexico’s consumer protection agency Profeco filed a class action lawsuit against OCESA and Ticketmaster for unilaterally canceling tickets for events between 2021 and 2023. After an investigation, Ticketmaster denied supervisory access. on site In April, the company refunded ticket prices and paid compensation to consumers at the request of regulators. OCESA and Ticketmaster also used their market power (together they control 64.5% of the live entertainment market in Mexico) to impose exclusive contracts, which led to Mexican lawmakers have proposed banning the agreements.
Perhaps most disturbingly, the Justice Department lawsuit reveals how Live Nation retaliate against venues that do not abide by their exclusive contracts, From forcing them to hold events on less favourable dates, to refusing to promote shows and prohibiting the resale of tickets on other platforms. If the U.S. government prevails, it could encourage regulators in other markets to challenge the mandate. Whether it’s Live Nation or the local monopoly.
The Live Nation-Ticketmaster case strikes at the heart of how we structure access to the arts and culture, which are essential components of the human experience, something Attorney General Merrick Garland emphasized when he announced the lawsuit. Garland described how seeing a young Bruce Springsteen open for Bonnie Raitt in the 1970s “changed” him. Anyone who has ever had the sublime experience of seeing their favorite band or artist perform live can relate. No monopolist seeking only to maximize its own profits should have to do that.
Karina Montoya is a senior reporter and policy analyst at the Center for Press and Freedom, a project of the Open Markets Institute. Daniel A. Hanley is a senior legal analyst at the Open Markets Institute.
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