Ticketmaster hearings: Could Washington dismantle Live Nation?

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The Ticketmaster hearings: After the Taylor Swift ticket debacle, could Washington end up dismantling the Live Nation behemoth?

Live Nation, Ticketmaster’s parent company, won’t be broken up Tuesday, but its president is facing questions from both Republicans and Democrats on the Senate Judiciary Committee who remain iffy on the merger and share the outrage of Taylor Swift’s fans who blame it for missing out on her latest tour.

Live Nation executives are testifying before the Senate Judiciary Committee where they’re facing questions from the top Democrat and Republican on the antitrust subcommittee, Sens. Amy Klobuchar of Minnesota and Mike Lee of Utah, who are both skeptical of the company’s dominance in the ticket sales market.

Klobuchar and Lee planned the hearing after the implosion of ticket sales in November for Swift’s upcoming tour, when millions of fans were locked out of buying tickets or had to resort to paying extremely high prices during what was supposed to be a presale. The Swift fiasco soon focused attention on both Ticketmaster’s customer service and the dominant market position Live Nation has, controlling some 70 percent of the live events ticketing market.

At the heart of this congressional hearing is a question Live Nation would probably like to avoid: Is it just a very large business that fumbled one big tour, or is it engaging in monopolistic practices that violate antitrust law? It’s up to the Department of Justice to make two determinations — and prove them in court. The first is whether Live Nation is a monopoly that controls the market for ticketing not because of a superior service or low prices, but by leveraging the power it has in tour promotion. The second is whether it is harming consumers by charging prices for its ticketing services in the form of fees that a more competitive market would eliminate.

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While Swift does not use Live Nation as her tour promoter, the company she does work with, AEG, said that the vast majority of the venues are locked into exclusive deals with Ticketmaster. “The artist didn’t choose Live Nation and yet all but five of her concerts were ticketed through Ticketmaster because they have exclusivity with the largest venues,” said Krista Brown, a senior policy analyst at the American Economic Liberties Project, which is part of a coalition of groups advocating for the breakup of Live Nation.

In the wake of the Swift ticket sale, some Swift fans filed a suit against Live Nation, but the greatest threat to the company almost certainly comes from a Justice Department antitrust investigation that started before the presale but news of which emerged only afterward. Now, Congress is also getting involved.

Congress has been skeptical of the fees Ticketmaster charges and markups in the secondary market, and has started to take more interest in the company, with legislators in both parties agreeing that the conglomerate needed to be looked into.

In a response to questions from Grid, Live Nation pointed to the size of the ticket market, identified several of its competitors and insisted that “our belief and practice is that content owners like teams and artists get to decide how their tickets get to their fans.”

The ongoing hearing could be when the undercurrent of discontent from artists, fans, venues, competitors and lawmakers finally breaks, providing public support and a public record for potentially aggressive actions taken by Justice Department prosecutors, up to and including a breakup of Live Nation and Ticketmaster.

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Live Nation controls two markets

Live Nation and Ticketmaster merged in 2010, a deal that required they operate under a Justice Department agreement because the two companies would control significant shares of both organizing tours as well as ticketing.

The potential for using one business to advantage the other was always a concern, namely that Live Nation could use its leverage as a promoter, which brings artists to venues, in order to pressure them into using Ticketmaster for ticketing, which then would allow Ticketmaster to charge high fees and underinvest in its product.

Antitrust enforcers tend not to merely look at how big a company is or how much market share it has, but instead to see if it’s locking competitors out of the market entirely.

Live Nation claims that there is ample competition, pointing both to the secondary market for tickets as well as companies like SeatGeek (whose chief executive is scheduled to testify at Tuesday’s hearing) and AXS, and that it has invested substantial resources into its ticketing service.

In the case of Live Nation and Ticketmaster, its critics argue, consumer choice could be limited by the promotion and ticketing service businesses working together to implicitly or explicitly force its partners, namely venues, to use Ticketmaster. Venues fear (with some good reason) that tours promoted by Live Nation might refuse to play there based on their choice of ticketing service.

In 2020, the Justice Department accused that Ticketmaster “repeatedly and over the course of several years engaged in conduct that, in the Department’s view, violated” the 2010 agreement and extended it out to 2025 and imposed a million-dollar penalty for each violation going forward.

The decree “does not appear to have been effective,” Judiciary Committee Chair Dick Durbin (D-Ill.) said Tuesday.

Congress is a problem for Live Nation, and it knows it

While Congress can pass new legislation that would force companies to break up, typically the Justice Department takes the lead through a suit using its existing antitrust powers. But lawmakers can create a record of conduct that can be used by regulators to build a case.

Hearings, like Tuesday’s, “provide a platform for those within the industry to speak about the harms and potential harms of Live Nation,” Brown told Grid.

Live Nation itself is perfectly aware of the risks of congressional displeasure. Live Nation hired a former staffer for the subcommittee that it’s facing Tuesday, Politico reported, and according to Open Secrets, the company spent over $2 million lobbying in the past two years.


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Congress can also put pressure directly on regulators and prosecutors. In a letter to the Justice Department, a group of Democratic House members requested the DOJ “prevent anti-competitive practices and protect consumers, artists, and independent venues by immediately beginning a process to review and reverse the disastrous Live Nation-Ticketmaster merger.”

The penalties for antitrust violations can be severe

If the DOJ decides Ticketmaster broke the rules, it could seek to punish it through the existing consent decree or even seek to break it up. The latter option is quite dramatic and would require a legal process that Live Nation would fiercely contest, although it would be supported by its competitors and likely some artists.

When the Department of Justice sought to break up Microsoft over allegations that it was using its dominant position in the operating system business to force personal computer manufacturers to include its applications, the investigation and subsequent trial and appeals took almost a decade, with one court’s order for Microsoft’s breakup eventually being overturned.

An antitrust case would not just have to prove that Live Nation has a dominant position in its industry but that it uses it to exclude competitors, whether they be other ticketing services or other promoters.

“The only way to restore competition in this industry is to break up” Live Nation and Ticketmaster, Jack Groetzinger, the chief executive of SeatGeek, told the panel.

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Brown would like to see the Department of Justice break up both Live Nation and Ticketmaster as well as split off its artist management business and put restrictions on Ticketmaster having exclusive deals with venues for 10 years.

“Ultimately, it’s a structural change that’s needed to unwind the anti-competitive effects of their monopoly. That would be the hands of the DOJ,” she said.

Thanks to Lillian Barkley for copy editing this article.

  • Matthew Zeitlin
    Matthew Zeitlin

    Domestic Economics Reporter

    Matthew Zeitlin is an economics reporter at Grid focused on the domestic impact of major stories such as coronavirus, the supply chain and economic volatility.