In 2022, Ticketmaster's mishandling of sales for Taylor Swift's Eras tour prompted an enormous public outcry.
The Justice Department filed a federal lawsuit Thursday accusing Ticketmaster and its parent company Live Nation of illegally monopolizing the live entertainment industry to the detriment of concertgoers and artists alike.
In a 128-page civil suit filed in U.S. District Court for the Southern District of New York, federal officials allege that Live Nation has illegally thwarted competition and unduly burdened consumers in part through its ownership of Ticketmaster, which effectively gives it control over much of the market for live entertainment.
Justice Department officials said Thursday they are seeking structural changes to how the company does business, which could include breaking apart the two entities.
In 2022, Ticketmaster's mishandling of ticket sales for Taylor Swift's The Eras Tour prompted enormous public outcry over Live Nation's hold on the entertainment and ticketing industries. The Justice Department's Antitrust Division was already investigating the company when the Swift fiasco unfolded, CBS News previously reported.
The lawsuit
Attorney General Merrick Garland announced the suit at the Justice Department, laying out the core accusations in the complaint.
"We allege that Live Nation has illegally monopolized markets across the live concert industry in the United States for far too long. It is time to break it up. The American people are ready for it," said Garland, a known Swift fan, in a not-so-subtle nod to one of her songs.
Joined by 29 states and the District of Columbia, the federal suit accused the entertainment giant of blocking innovation in the industry by establishing what officials referred to as a "self-reinforcing 'flywheel,'" using its various business components to capture all fees associated with concerts.
This flywheel, according to the complaint, allows the company to charge customers fees, and then use that revenue to attract major artists and lock them into longer-term deals to sell more tickets.
"Live Nation's monopoly, and the anticompetitive conduct that protects and maintains its monopoly, strikes a chord precisely because the industry at stake is one that has for generations inspired, entertained, and challenged Americans," the complaint said. "Conduct that subverts competition here not only harms the structure of the live music industry and the countless people that work in that industry, but also damages the foundation of creative expression and art that lies at the heart of our personal, social, and political lives."
In 2010, federal regulators, including those at the Justice Department, approved the merger of Live Nation and Ticketmaster, which ultimately allowed the promotional, venue and ticketing industries to be brought under the control of one corporation.
Thursday's lawsuit, however, said the relationship has since hurt American consumers and presents barriers to artists. Senior Justice Department officials alleged that Live Nation and Ticketmaster worked to unlawfully squeeze consumers for money even after artists get paid, through what they characterized as monopolistic intermediaries.
According to the complaint, Live Nation has strong-armed businesses with financial retaliation if they engage with its competitors and has wielded its control over the market by threatening to pull future events if venues opt not to use Ticketmaster exclusively.
Such control, the Justice Department said, has meant concertgoers pay more for tickets and touring artists sign long-term agreements to solely perform at venues that use the ticket-selling program.
In a statement, Live Nation said the suit "won't solve the issues fans care about relating to ticket prices, service fees, and access to in-demand shows." The company said that "[c]alling 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," noting that "competition has steadily eroded Ticketmaster's market share and profit margin."
"We will defend against these baseless allegations, use this opportunity to shed light on the industry, and continue to push for reforms that truly protect consumers and artists," Live Nation said.
At a Senate hearing in January 2023, artists testified about the hold Live Nation had over them. Clyde Lawrence, of the band Lawrence, testified that Live Nation's power lies in the fact that it's the promoter, the venue and the ticket company.
"Because Live Nation owns the venue, fronts the money for the show and sells the tickets, they have outsized power when negotiating with artists," he told the panel, offering an example: For one show, Lawrence set ticket prices at $30. After Ticketmaster added a 40% fee, fans paid $42 per ticket. And after paying for facility costs, the band made $12 per ticket — about half of which went to covering the costs of touring.
This story was originally published by CBS News on May 23, 2024 at 12:04 p.m. ET.
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