antitrust
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Less than three weeks after two dozen Taylor Swift fans sued Live Nation over Ticketmaster’s disastrous presale of tickets to her Eras Tour in November, another similar lawsuit has been filed against the concert giant in California federal court.
Filed Tuesday (Dec. 20), the class-action lawsuit, brought by Swift fan Michelle Sterioff, accuses Live Nation and subsidiary Ticketmaster of violating federal antitrust and unfair competition laws and “intentionally and purposefully” misleading “millions of fans into believing” Ticketmaster would prevent bots and scalpers from participating in presales for the tour.
Similar to the lawsuit filed earlier this month, Tuesday’s lawsuit alleges that Live Nation and Ticketmaster, which merged in 2010, represent a monopoly in both the primary and secondary ticketing markets and have used that alleged monopoly power “in a predatory, exclusionary, and anticompetitive manner.” According to the complaint, this monopoly is used to charge “supracompetitive” ticketing fees that can increase the price of tickets “by 20-80%” over their face value.
“Ticketmaster…has violated the policy, spirit, and letter of [antitrust] laws by imposing agreements and policies at the retail and wholesale level that have prevented effective price competition across a wide swath of online ticket sales,” the complaint reads, adding that the company “is only interested in taking every dollar it can from a captive public.”
Sterioff claims that she registered for the Eras Tour presale on Nov. 1, 2022, and “relied” on Ticketmaster’s claim that its Verified Fan program “would ‘level the playing field’” so that more tickets would go to real fans over bots. However, she claims she was unable to secure a ticket during the presale on Nov. 15 or Nov. 16, forcing her to purchase tickets “through an alternate secondary ticketing service provider” after Ticketmaster canceled the general public sale, citing widespread service delays and website crashes as millions of fans tried -– and many failed –- to buy tickets.
Additionally, Sterioff says the amount she paid for her ticket on the secondary market was subject to Ticketmaster’s “monopolistic prices” due to the company’s dominance in the secondary ticketing market as well. She cites a Ticketmaster technology that limits ticket purchasers from transferring tickets unless they’re resold through the company’s secondary ticketing platform — essentially making it all but impossible to purchase a Swift ticket outside the Ticketmaster ecosystem. That allows the company “to charge monopolistic ticketing fees every time a single ticket is resold,” the complaint adds.
There are a total of eight counts listed in Sterioff’s complaint, including violation of California’s Consumers Legal Remedies Act; intentional misrepresentation; common law fraud; fraudulent inducement; antitrust violations; violation of California’s Unfair Competition Law; violation of California’s False Advertising Law, and quasi-contract/restitution/unjust enrichment.
Sterioff is asking the court for injunctive relief, statutory damages, punitive or exemplary damages, costs of bringing the lawsuit and more.
Reps for Live Nation and Ticketmaster did not immediately return a request for comment.
In the wake of the Swift ticketing controversy, Ticketmaster apologized to fans and pinned the blame on a “staggering number of bot attacks” and “unprecedented traffic.” But that explanation has seemingly not been enough for many of the company’s critics, who have resurfaced longstanding complaints about the outsized power Ticketmaster and Live Nation have wielded in the market for live music since they merged.
In November, Sen. Amy Klobuchar (D-MN) and her counterpart on the Senate Judiciary Subcommittee, Sen. Mike Lee (R-UT), jointly announced they would be holding a hearing to examine the effects of consolidation on the ticketing industry. Live Nation and Ticketmaster are also reportedly under investigation by the Justice Department over whether the companies represent an illegal monopoly, though that probe is said to have predated the Swift incident.
Just two weeks after Spotify CEO Daniel Ek ripped Apple for “bullying” app owners in a Nov. 30 tweet thread, the executive doubled down on his comments during an interview that aired Thursday (Dec. 15) on the streamer’s For The Record podcast. During the appearance, Ek said Apple’s controls over payments and data on its app store create an anticompetitive environment that is “harmful for the economy and consumers.”
“They continue to give themselves unfair advantages really at every turn and setting themselves up as both the referee and player in this game,” stifling competition and hurting competitors and consumers, Ek said.
A vocal critic of the iPhone maker over the years, Ek has ramped up calls against Apple’s policies in recent months. The U.S. Senate has just weeks left in its current term to pass a bill that would rein in the control Apple and Alphabet Inc.’s Google exert over their apps marketplaces.
Introduced last year by Democratic Senators Amy Klobuchar and Richard Blumenthal along with Republican Senator Marsha Blackburn, the Open App Markets Act would block app store owners from requiring app developers to use its payments platform. The bill would also ban app stores from pushing their own products over competitors’ products and permit app developers to communicate more freely with customers and open the door to apps being downloadable from more platforms.
Speaking on the podcast, Senator Blackburn said the bill is gaining support daily.
“The reason we need this is to open up the marketplace to allow more competition, to allow developers to be able to take their product directly to the consumer,” which would lower some costs for developers at a time of high inflation in the U.S., Blackburn said.
App stores run by Apple and Google have traditionally taken a cut of in-app purchases. Prior to 2016, Spotify charged users 30% more if customers upgraded to a premium subscription inside Apple’s App Store to offset Apple’s 30% fee. To save on fees, Spotify has not allowed in-app purchasing on its Apple app since 2016.
Ek threw the weight of his company behind Blackburn’s bill on the podcast, saying that Spotify believes there needs to be regulation in this space to make clear that developers or companies can interact with consumers.
“There is an enormous concentration of power where one company here [is] dictating the rules for how millions of companies should be able to conduct business,” Ek said on the podcast.
This is not the first time Ek has taken on Apple’s App Store in the regulatory arena. In 2019, Spotify filed a complaint with the European Commission against Apple, alleging that rules governing its App Store “purposely limit choice and stifle innovation at the expense of the user experience — essentially acting as both a player and referee to deliberately disadvantage other app developers.”
Apple did not immediately respond to a request for comment.
In the wake of Ticketmaster’s disastrous sale of tickets to Taylor Swift’s upcoming tour, a report has surfaced that the U.S. Department of Justice is investigating whether parent company Live Nation has abused its huge market share in the live music industry.
According to a story Friday in the New York Times, the DOJ’s antitrust division had already been scrutinizing Live Nation for months before Tuesday’s botched rollout, which saw widespread service delays and website crashes as millions of fans tried – and many failed – to buy tickets for Swift’s 2023 Eras Tour.
The Times report said that antitrust investigators have been contacting music venues and others involved in the live music industry for months to ask about Live Nation’s practices, aiming to determine whether the company maintains an illegal monopoly over the sector. The story was sourced to “two people with knowledge of the matter”; a spokesperson for the DOJ did not immediately return a request for comment.
Though the DOJ probe reportedly predates the Swift debacle, it echoes criticism that has been leveled at Live Nation in the days since the messy Eras presale.
On Thursday, Sen. Amy Klobuchar (D-Minn.), the chair of the Senate subcommittee for antitrust issues, wrote an open letter to Live Nation, complaining that the company’s market power “insulates it from the competitive pressures that typically push companies to innovate and improve their services.” Klobuchar said the results were the kind of “dramatic service failures” that took place during Swift’s presale.
Rep. Alexandria Ocasio-Cortez (D-N.Y.), was even blunter, tweeting Tuesday: “Daily reminder that Ticketmaster is a monopoly, it’s merger with Live Nation should never have been approved, and they need to be reigned in. Break them up.”
As alluded to by Ocasio-Cortez, Ticketmaster and Live Nation have long been dogged by accusations that they exert an unfair dominance over the market for live concerts, particularly since they merged in 2010 to create their current structure.
The combined entity has operated for its entire existence under a so-called consent decree imposed by the DOJ when it approved the merger. Under the decree, Live Nation is prohibited from retaliating against venues that refuse to use Ticketmaster. Those restrictions were set to expire in 2020 but were extended by five years in 2019 after the DOJ accused Live Nation of repeatedly violating the decree.
Ticketmaster has already tried to offer explanations for what went wrong on Tuesday, publishing a since-deleted in-depth blog post that said that it had misjudged demand for presale tickets and was ill-prepared for the millions of fans that tried to log in.
“I apologize to all our fans. We are working hard on this,” Liberty Media CEO and Live Nation chairman Greg Maffei said in an appearance on CNBC on Thursday. “Building capacity for peak demand is something we attempt to do, but this exceeded every expectation.”
Whether or not that explanation satisfies federal antitrust investigators, it does not appear to have been enough for Swift. In a statement issued Friday in which the star said the calamitous presale “really pisses me off,” Swift did not call out Ticketmaster explicitly, but laid the blame on an unnamed “outside entity.”
“I’m not going to make excuses for anyone because we asked them, multiple times, if they could handle this kind of demand and we were assured they could,” Swift wrote.
Calls to break up Live Nation Entertainment are getting louder.
The American Economic Liberties Project, a nonprofit advocating for more aggressive antitrust enforcement, urged the Department of Justice on Wednesday to unwind the merger between Ticketmaster and Live Nation for allegedly price gouging customers in addition to strong-arming artists and venues into accepting unfavorable conditions. In a letter to the DOJ obtained by The Hollywood Reporter, the group claims that the live-events behemoth continues to violate the conditions of a 2010 settlement greenlighting the deal.
“Ticketmaster’s market power over live events is ripping off sports and music fans and undermining the vibrancy and independence of the music industry,” said Sarah Miller, executive director of the American Economic Liberties Project. “With new leadership at the DOJ committed to enforcing the antitrust laws, our new campaign helps connect the voices of fans, artists and others in the music business who are sick and tired of being at the mercy of Ticketmaster’s monopoly with enforcers who have the power to unwind it.”
Ticketmaster and Live Nation merged in 2009, two years after the live-events organizer announced plans to build its own ticketing service. Prior to the deal, Live Nation was Ticketmaster’s largest customer.
The merger was met with pushback. Bruce Springsteen, upset at Ticketmaster for steering concertgoers toward its own secondary ticketing platform, wrote in a 2009 letter to his fans that “the one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing.” (Springsteen’s current tour lists dates with Ticketmaster listings.)
At the time, David Balto, an antitrust attorney at the Center for American Progress Action Fund, testified to the Senate that the combined company “will cut off the air supply for any future rival to challenge its monopoly in the ticket distribution market,” and use its newfound reach to “diminish competition in independent concert promotion.”
Antitrust regulators approved the deal with certain conditions. They required Ticketmaster to sell its ticketing service subsidiary, Paciolan, to Comcast and to license its ticketing software to Live Nation’s rival, AEG. The new company was also not allowed to bundle or retaliate against venues for working with other ticketing services.
The American Economic Liberties Project argues that Live Nation is violating the consent decree. It points to conditioning the availability of the company’s performers to independent venues using Ticketmaster’s services.
“Live Nation essentially uses its concert promotion services to bully venues away from using the few competitors that Ticketmaster still has,” states an analysis from the group. “If a venue opts not to use those services, Live Nation retaliates by effectively boycotting the venue. Because Live Nation controls so much of the market for concert promotion, being able to book performers who contract with Live Nation can make or break a venue’s ability to survive.”
In 2019, the DOJ found that Live Nation had been violating the terms of the settlement by forcing venues to accept Ticketmaster’s ticketing services as a condition for hosting Live Nation performers and retaliating against those that refused. The agency, in turn, threatened to assess monetary penalties for additional violations and installed a monitor tasked with investigating further breaches of the consent decree, which was extended until 2025.
The organization also claims that Ticketmaster wouldn’t be able to charge hidden and excessive fees if it weren’t an illegal monopoly and that it facilitates price gouging by encouraging scalping. The company runs a secondary ticket market called Ticketmaster Resale, where they charge a second, more lucrative fee in addition to the fee assessed on its primary ticket market. By allowing scalpers to buy up the majority of tickets, Ticketmaster can essentially assess a second fee on consumers who missed out on the initial sale of concert tickets.
“Ticketmaster has an incentive to minimize the genuine sales by concertgoers on the primary market, by either restricting sales or allowing scalpers to buy, and then profiting from the price gouging in the secondary market, where consumers pay far more,” the analysis states. (The American Economic Liberties Project’s petition is here.)
This article was originally published on THR.com.