USA vs. Ticketmaster: Monopoly lawsuit enters its final phase

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In early March, the trial against Live Nation Entertainment and its subsidiary Ticketmaster began before a federal court in Manhattan. The US Department of Justice (DOJ) and 40 state attorneys general aim to prove over the next six weeks that the company controls key areas of the live business – from artist promotion and major venues to ticket sales – and uses this position to stifle competition.

Government speaks of a “broken” market

The lawsuit is based on US antitrust law, particularly the prohibition of monopolization and anti-competitive exclusive agreements. If the Department of Justice prevails, structural measures, including the breakup of the company, are possible.

In its opening statement, DOJ attorney David Dahlquist warned of a broken industry controlled by Live Nation and Ticketmaster. Live Nation has created a self-reinforcing system: those who want to play large amphitheaters or book well-known acts can hardly bypass the company's own ticketing service.

Venues considering a switch to rivals like SeatGeek or AXS have faced disadvantages. According to the DOJ, Ticketmaster holds about 80 percent of the primary market for major concert tickets in the US. The opposing side denies all allegations.

Pressure on venues and exclusive contracts

Initial witness testimonies from the ongoing trial accuse the event promoter of exerting pressure. John Abbamondi, former head of the operator of the Barclays Center in Brooklyn, described how his arena wanted to change ticket providers in 2021. Competitor SeatGeek offered better financial terms and more modern technology.

When he informed Live Nation CEO Michael Rapino about this, the conversation was tense. Rapino referred to the competition from a new arena in Queens, which could also host Live Nation shows. Abbamondi testified in court that he understood this as a veiled threat. After switching to SeatGeek, there was a dramatic decline in Live Nation concerts at the Barclays Center. Pop star Billie Eilish performed in the new arena instead.

Mitch Helgerson from the Minnesota Wild ice hockey team painted a similar picture. His organization had also considered a change for economic reasons but ultimately did not dare. A Ticketmaster manager had indicated that Live Nation could then move its shows to a competing venue. They perceived this as a credible threat, Helgerson said. The long-term exclusive contracts between Ticketmaster and venues are also under scrutiny. According to the lawsuit, some of these agreements run for several years and make it difficult for competitors to gain access to major venues at all.

Furthermore, high revenues from ticket fees and sponsorships are allegedly used to exclusively bind artists. With this portfolio, they then convince venue operators to sign exclusive ticketing agreements as well. Live Nation, on the other hand, points to industry standard practices. Criticism is also directed at the fee structure. Garland speaks of “exorbitant” additional costs, from service and convenience fees to processing fees. Ticketmaster emphasizes that ticket prices are usually set by promoters, and only a small portion remains with the company as a commission.

Decision with signaling effect expected

Ticketmaster and Live Nation have been making negative headlines for quite some time. Particularly explosive for consumers: The US Federal Trade Commission (FTC) accuses Ticketmaster, in parallel to the current proceedings, of coordinating with resellers and making misleading price statements. Additionally, the competition authority in Great Britain recently obliged Ticketmaster to increase transparency in pricing after tickets for the Oasis band's reunion tour were offered at highly inflated prices.

Ticketmaster uses a controversial system that increases ticket prices in real-time during presale phases as demand rises. EU parliamentarians also view this pricing model, which is increasingly spreading in Europe, with concern. Last year, there was also an alleged data leak: the hacker group ShinyHunters claims to have stolen information from up to 560 million Live Nation customers.

If the jury finds monopolization, the court could impose far-reaching conditions – up to the spin-off of business units. An acquittal, on the other hand, would weaken the aggressive antitrust policy of the US government. For concert-goers, it ultimately comes down to choice, transparency, and, above all, fair prices, as event tickets are increasingly becoming a luxury good. Whether the trial will change anything about this will be decided in the coming weeks in the Manhattan courtroom.

(joe)