The Department of Justice sues Live Nation and Ticketmaster for monopolizing the concert industry

Washington — The Justice Department filed a federal lawsuit Thursday accusing Ticketmaster and its parent company Live Nation of illegally monopolizing the live entertainment industry at the expense of concertgoers and artists alike.

in A 128-page civil lawsuit The federal officials, filed in the U.S. District Court for the Southern District of New York, alleged that Live Nation unlawfully discouraged competition and unduly burdened consumers in part through its ownership of Ticketmaster, effectively giving it control of a significant portion of the live entertainment market.

Justice Department officials said Thursday they are seeking to make structural changes to how the company does business, which could include breaking up the two entities.

In 2022, Ticket Manager Mishandling of ticket sales for Taylor Swift’s The Eras Tour It sparked massive public outrage over Live Nation’s control of the entertainment and ticketing industries. CBS News previously reported that the Justice Department’s antitrust division was already investigating the company when Swift’s fiasco was revealed.

The lawsuit

Attorney General Merrick Garland announced the case at the Department of Justice, outlining the underlying charges in the complaint.

“We allege that Live Nation has illegally monopolized markets across the live concert industry in the United States for too long. It’s time to break it up. The American people are ready for it,” said Garland, a well-known Swift fan. A not-so-subtle reference to One of her songs.

The federal lawsuit, joined by 29 states and the District of Columbia, accused the entertainment giant of stifling innovation in the industry by creating what officials referred to as a self-reinforcing “flywheel,” using its various business components to capture all associated fees. With concerts.

This flywheel, according to the complaint, allows the company to charge customers fees, then use that revenue to attract major artists and tie them to long-term deals to sell more tickets.

A graphic included in the Justice Department’s lawsuit against Live Nation and Ticketmaster shows the “flywheel” the company uses to boost different parts of its business.

Department of Justice

“Live Nation’s monopoly and the anti-competitive behavior that protects and maintains its monopoly strikes a chord precisely because the industry at risk is one that has inspired, entertained, and challenged Americans for generations,” the complaint said. “The behavior that undermines competition here not only harms the structure of the live music industry and the countless people who work in this industry, but it also harms the foundation of creative expression and artistry that lies at the heart of our personal, social and political lives.”

In 2010, federal regulators, including those at the Department of Justice, approved the merger of Live Nation and Ticketmaster, ultimately allowing the promotion, venues and ticketing industries to be placed under the control of a single company.

But the lawsuit filed Thursday said the relationship has since hurt American consumers and presents barriers for artists. Senior Justice Department officials alleged that Live Nation and Ticketmaster illegally pressured consumers for money even after artists were paid, through what they described as monopolistic intermediaries.

According to the complaint, Live Nation has strong-armed businesses that face financial retaliation if they do business with its competitors, and has exercised market control by threatening to pull future events if venues choose not to use Ticketmaster exclusively.

Such control means concertgoers pay more for tickets and touring artists sign long-term agreements to perform only at venues that use the ticketing program, the Justice Department said.

Live Nation said in a statement that the lawsuit “will not resolve the issues fans care about regarding ticket prices, service fees, and access to on-demand shows.” The company said,[c]Deeming Ticketmaster a monopoly may be a PR win for the Department of Justice in the short term, but it would 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 shine a spotlight 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, the artists to attest About Live Nation controlling them. Clyde Lawrence, of Lawrence’s band, testified that Live Nation’s strength lies in the fact that they are the promoter, venue and ticket company.

“Because Live Nation owns the venue, provides the money for the show and sells the tickets, they have tremendous power when negotiating with artists,” he told the committee, offering an example: For one show, Lawrence set ticket prices at $30. After Ticketmaster added a 40% fee, fans paid $42 per ticket. After paying for the facility, the band received $12 per ticket — about half of which went to cover tour costs.

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