Ken Paxton joins Biden DOJ coalition suing Ticketmaster, Live Nation
NBC 5 News
The Justice Department has filed an antitrust lawsuit against Live Nation Entertainment, accusing the world's largest concert promoter and ticketing company of running an illegal monopoly and calling to break up its merger with Ticketmaster.
Texas Republican Attorney General Ken Paxton said Thursday he was part of a bipartisan coalition of attorneys general in dozens of states joining the federal civil antitrust lawsuit.
“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,” Attorney General Merrick Garland said in announcing the lawsuit. “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.”
The lawsuit, filed in the Southern District of New York, alleges that Live Nation has undermined competition for ticketing live events by squeezing out smaller promoters. It comes 14 years after the DOJ allowed Live Nation to acquire Ticketmaster, creating a live-event conglomerate of unrivaled power and sparking competition concerns among consumer advocates.
“Mega-corporations cannot control entire industries to create anti-competitive environments, drive up prices, and take advantage of consumers,” said Paxton in a statement. “With this lawsuit, we aim to ensure fair competition for ticket sellers, concertgoers, venues, and others in the entertainment space who have been affected by this merger.”
At the time, the agency approved the merger through a 10-year consent decree — which imposed conditions on the merger, including that Live Nation was prohibited from threatening to withhold concerts from a venue that chose a different ticketing firm to manage the sales. In 2019, the consent decree was extended to 2025 after the Justice Department found Live Nation repeatedly violated the conditions of the merger.
In Thursday's lawsuit, the Justice Department accuses Live Nation of working with a venue management firm to steer clients into signing deals to exclusively use Ticketmaster. The firm, Oak View, is co-founded by former Live Nation chairman Irving Azoff and oversees dozens of arenas around the world, NBC News reports.
It also claims that Live Nation has continued to violate its consent decree conditions by stumping out other concert-promotion businesses through threats of retaliation or by acquiring startups it saw as potential competitors. The Justice Department said Live Nation maintained a stronghold over the live music scene by using long-term contracts to keep venues from choosing rival ticketing firms and threatening venues to withhold artists from venues if they didn't choose Ticketmaster as their exclusive seller. It said Live Nation also threatened to retaliate against one firm if it didn't stop a subsidiary from competing for artist promotion contracts.
Paxton and other coalition partners are requesting the court to enjoin Live Nation from continuing its anticompetitive practices, require Ticketmaster and Live Nation to separate, and provide restitution to customers negatively affected by the anticompetitive monopoly.
“The live music industry in America is broken because Live Nation-Ticketmaster has an illegal monopoly,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Our antitrust lawsuit seeks to break up Live Nation-Ticketmaster’s monopoly and restore competition for the benefit of fans and artists.”
In a statement to NBC, Live Nation denied it engages in practices that violate antitrust laws and said it will defend itself against the Justice Department's "baseless allegations."
"The DOJ's lawsuit won't solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows," Live Nation said. "Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin."
The move comes as the Biden administration has vowed to promote competition by cracking down on corporate monopolies and their anti-competitive practices.
Ticketmaster came under intense scrutiny in 2022 after its website crashed during a pre-sale event for Taylor Swift's Eras Tour. The company said its site was overwhelmed by both fans and attacks from bots, which were posing as consumers in order to scoop up tickets and sell them on secondary sites. Thousands of people lost tickets after waiting for hours in an online queue.
The debacle led to a congressional hearing, with the Senate Judiciary subcommittee that oversees competition policy and antitrust issues scrutinizing the outsized role of Ticketmaster in the ticketing industry at a cost to consumers.
Senators also took aim at Ticketmaster's fees. U.S. Sen. Amy Klobuchar, a Minnesota Democrat, recalled piling into a friend’s car in high school to go to concerts by Led Zeppelin, The Cars and Aerosmith. These days, she said, ticket prices have gotten so high that shows are too expensive for many fans. Klobuchar said ticket fees now average 27% of the ticket cost and can climb as high as 75%.
Live Nation has previously defended its fees and ticket pricing, saying "promoters don't set prices, artists do."
But competitors, like Seat Geek CEO Jack Groetzinger, said even if Live Nation doesn't own a venue, it prevents competition by signing multi-year contracts with arenas and concert halls to provide ticketing services. If those venues don't agree to use Ticketmaster, Live Nation may withhold acts. That makes it tough for competitors to disrupt the market.
Ticketmaster is the world’s largest ticket seller, processing 500 million tickets each year in more than 30 countries. Around 70% of tickets for major concert venues in the U.S. are sold through Ticketmaster, according to data in a federal lawsuit filed by consumers last year.