Updated May 23, 2024 at 14:20 PM ET
The Department of Justice and 30 state and district attorneys general across the country filed a federal lawsuit Thursday against Live Nation Entertainment and its wholly owned subsidiary Ticketmaster. The suit alleges that Live Nation has created a monopoly on live event ticket prices across the United States. The civil antitrust suit was filed in the Southern District of New York.
This fight has been long in coming: Music fans and other consumers, performers, independent venues and even members of Congress have argued that Ticketmaster, which merged with Live Nation in 2010, had artificially pushed ticket prices sky-high. Live Nation has long been a dominant player in the live event marketplace, with substantial holdings in venues, concert promotions, music festivals, ticketing, sponsorship, advertising and artist management – holding so much power across so many aspects of the business, the Justice Department alleges, that it is effectively able to limit its competition.
If successful, this suit could reshape the live event landscape – and the prices fans pay to see their favorite performers – across the country.
The state and district attorneys general joining the suit include several states that are home to major live event venues, including those of New York, California, Colorado, Florida and Texas.
In a lengthy statement provided to NPR on Thursday, Live Nation wrote in part: “The DOJ’s lawsuit won’t solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows. 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 got to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin.”
Within the suit, the Department of Justice and the states allege that Live Nation and Ticketmaster engaged in several forms of anticompetitive conduct, including retaliating against other promotion companies and venues that worked with its rivals; locking out competitors with long-term, exclusive ticketing contracts; restricting musicians’ access to live event venues; and strategically acquiring smaller, independent companies that Live Nation allegedly perceived as threats to its dominance.
Earlier this month, in a bid to increase transparency for consumers, the House of Representatives passed the TICKET Act, which would force Live Nation and other ticket sellers to list all the costs and fees within a live event ticket price. The bill, which was introduced in the Senate by Ted Cruz of Texas, has been supported by hundreds of prominent musicians, including Billie Eilish, Dave Matthews and Nile Rodgers, who wrote in a joint statement: “We are joining together to say that the current system is broken: predatory resellers and secondary platforms engage in deceptive ticketing practices to inflate ticket prices and deprive fans of the chance to see their favorite artists at a fair price.”
According to Thursday’s filing, Live Nation Entertainment currently owns or controls over 250 concert venues across North America, and controls around 60 percent of concert promotions at major concert venues across the U.S. The company also directly manages more than 400 musical acts.
In the suit, the Department of Justice and the states asserted: “With this vast scope of power comes influence. Live Nation and its wholly owned subsidiary, Ticketmaster, have used that power and influence to insert themselves at the center and the edges of virtually every aspect of the live music ecosystem.”
“It is time to break up Live Nation-Ticketmaster,” said Attorney General Merrick Garland in a statement.
In the past, and again in its statement to NPR on Thursday, Live Nation argued that musicians — not its own company — are the ones to ultimately set their own ticket prices. Live Nation executive vice president of corporate and regulatory affairs Dan Wall said that the suit “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 [what] primary tickets cost.”
“It is not surprising that Live Nation has pointed its finger at artists,” a senior Justice official said on background on Thursday morning. “In an industry in which artists have historically been squeezed for compensation for their creative work, it’s important that artists are properly compensated.”
“To us, that’s a little bit of a red herring,” the official continued, referring to Live Nation’s previous argument. “How is the system set up? How is Live Nation’s control at all levels of the system allowing for a process that’s distorted in part by Live Nation’s power?”
The DOJ is pressing for “structural relief” – that is, it is asking the federal court to break up the Live Nation-Ticketmaster combined company, which the DOJ itself had approved in the 2010 merger. Justice Department officials are now arguing that since the merger, Live Nation has created a stranglehold on the live event industry.
Thursday’s case is the latest lawsuit by the Biden administration against major corporations that it has accused of abusing monopoly power. The Justice Department and the Federal Trade Commission have sued Apple, Google and Amazon. They’ve successfully stopped the mergers of publishers Penguin Random House and Simon & Schuster and of JetBlue Airways with Spirit Airlines. They’ve also unraveled a partnership between JetBlue and American Airlines.
Last year, however, federal officials lost their bids to block the merger of Microsoft and videogame giant Activision Blizzard; of Facebook parent Meta with virtual-reality company Within Unlimited; and of insurer UnitedHealth Group with tech firm Change Healthcare.
“While we do not comment on specific enforcement matters, President Biden strongly supports fair and robust enforcement of the antitrust laws," said White House Press Secretary Karine Jean-Pierre in a statement Thursday. "The President launched the Strike Force on Unfair and Illegal Pricing because no American should pay higher prices or lose choices because companies break the law and engage in anti-competitive practices. His Administration has taken action to fight corporate greed by banning hidden junk fees—including event tickets—that unfairly increase prices for hardworking families trying to make ends meet. As the President has said, the American people are tired of being played for suckers.”
The announcement of the federal antitrust suit against Live Nation is just a first step in what will almost certainly be a long court process, so music fans likely won’t encounter lower ticket prices any time soon.
Copyright 2024 NPR
