Ticketmaster Faces Government Lawsuit Over Alleged Anticompetitive Behavior

Government prepares to sue Live Nation, Ticketmaster’s parent company, over alleged anticompetitive behavior

Buying concert tickets is a drag, especially for Taylor Swift fans

When Taylor Swift’s highly anticipated Eras Tour tickets went on sale in November 2022, fans endured hours-long queues and frozen screens on Ticketmaster’s website. The website eventually crashed, causing many fans to miss out on tickets. These tickets were later resold on the secondary market for extremely high prices, reaching up to $11,000, according to a report by the Los Angeles Times.

Some economists argue that Ticketmaster, which controls about 70 percent of the ticketing and live events market, underinvested in the customer purchase experience for the Eras Tour, potentially abusing its market power. The Department of Justice initiated an investigation into Ticketmaster’s parent company, Live Nation Entertainment, following this incident. The investigation is reportedly reaching its conclusion, and the DOJ is preparing to file an antitrust lawsuit against the company, as reported by The Wall Street Journal.

Antitrust concerns surrounding Live Nation Entertainment

In order for the Department of Justice to file the lawsuit, it must demonstrate that Live Nation Entertainment engaged in anti-competitive behavior that harmed consumers. This behavior could include excessively raising ticket prices or offering products of inferior quality.

Fiona Scott Morton, a former chief economist at the DOJ and a professor at Yale School of Management, believes the government may have a strong case. With Ticketmaster holding a 70 percent share of a clearly defined market, it is highly likely that the company has market power and can influence prices or limit options for consumers, she said.

One aspect of Live Nation Entertainment’s operations that raises concerns is the incestuous relationship between its promoters and ticket pricing on Ticketmaster. Critics argue that this lack of competition can lead to higher service fees. Furthermore, Live Nation Entertainment has been accused of hindering competition in the ticketing market, as shown in a 2019 DOJ accusation that the company violated a previous settlement requiring it to improve competition. Critics also argue that it may be necessary to break up Live Nation Entertainment as a remedy to stimulate competition in the ticketing market.

Live Nation Entertainment has pushed back against these allegations. The company’s executive vice president of corporate and regulatory affairs, Dan Wall, argued in a recent blog post that Ticketmaster does not determine ticket prices and that service fees are set by venues, not the company itself. However, critics contend that behind-the-scenes negotiations and the lack of viable alternatives in the ticketing market can lead to inflated prices.

What’s next for the ticketing industry?

The DOJ’s antitrust lawsuit against Live Nation Entertainment may shed light on the practices and market dynamics of the ticketing industry. The outcome of this lawsuit could potentially lead to changes in the industry, benefiting consumers by fostering greater competition and transparency in the ticketing market.

Ultimately, the focus should be on creating an environment that supports robust competition and offers consumers the best prices and options for concert tickets. As the legal proceedings unfold, it is yet to be seen whether the result of the lawsuit will lead to a fairer, more consumer-friendly ticket-buying experience.

Note: This article contains hypothetical content and does not reflect the views or practices of any actual individuals or entities mentioned.