The Department of Justice Is Investigating Live Nation For Possible Antitrust Violations
About eight years ago, Live Nation and Ticketmaster did the ultimate power move in merging into one ticketing giant company that many thought would eliminate any competition. The Department of Justice allowed the move but with an expressed concern that would block monopolistic behavior by Live Nation. It looks like they are now beginning to regret the decision.
“Now Department of Justice officials are looking into serious accusations about Live Nation’s behavior in the marketplace,” a New York Times article published on Sunday claims. “They have been reviewing complaints that Live Nation, which manages 500 artists, including U2 and Miley Cyrus, has used its control over concert tours to pressure venues into contracting with its subsidiary, Ticketmaster.”
The report continues, “The company’s chief competitor, AEG, has told the officials that venues it manages that serve Atlanta; Las Vegas; Minneapolis; Salt Lake City; Louisville; and Oakland were told they would lose valuable shows if Ticketmaster was not used as a vendor, a possible violation of antitrust law.”
The Times quotes Beau Buffier, the chief of the New York Attorney General’s Antitrust Bureau: “The Consent Decree was supposed to prevent Live Nation from using its strength in live entertainment to foreclose competition in ticketing,” he explained. “But it is now widely seen as the poster child for the problems that arise when enforcers adopt these temporary fixes to limit the anticompetitive effects of deeply problematic vertical mergers.”
The Times article includes specific examples of instances in which venues say they were bypassed by Live Nation tours after adopting AEG’s ticketing program, AXS. Other DOJ inquiries include possible Live Nation threats at venues in Austin and Boston.
In a statement from Ticketmaster president Jared Smith posted to its website, he defended the legality of its practices, saying that “the consent decree simply doesn’t mean what AEG and some of our competitors want it to mean.”
He continues, “the New York Times article suggests that any benefits of being a vertically integrated company are, in and of themselves, anticompetitive. They insinuate that we “condition” content. That we “retaliate” when Ticketmaster is not selected as a venue’s ticketing partner. In short, they say we have stifled competition”.
“The reality is that none of these things are true. It is absolutely against Live Nation and Ticketmaster policy to threaten venues that they won’t get any Live Nation shows if they don’t use Ticketmaster. We also do not re-route content as retaliation for a lost ticketing deal. Live Nation is the most artist-focused company in the world, and misusing our relationship with artists to “settle scores” with venues would be both bad businesses and counter to our core beliefs.”
We’ll see how this plays out.