Department of Justice
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Officials with the Department of Justice’s Antitrust Division plan to sue Live Nation after they wrap up a two-and-a-half-year investigation into the company, according to two high-level sources with knowledge of the matter.
The lawsuit will take aim at Ticketmaster’s use of exclusive venue contracts for its ticketing services, the sources say. Last week, Live Nation officials met with attorneys from the Department of Justice to discuss the case, including DOJ Assistant Attorney Jonathan Kanter, but neither the DOJ nor Live Nation commented on the meeting’s details. There’s no clear timeline on when the DOJ plans to officially close its investigation or file suit, and the two sides could meet again to discuss the case. Both The Wall Street Journal and Politico have previously reported that the DOJ planned to sue Live Nation in published reports earlier this year.
Live Nation officials are continuing to cooperate with the investigation, company president Joe Berchtold indicated on a May 2 earnings call. Based on the issues the DOJ has raised with Live Nation, Berchtold said he believes the lawsuit is related to “specific business practices at Live Nation” and “not the legality of the Live Nation/Ticketmaster merger.”
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That’s both good and bad for Live Nation officials. On the one hand, if the merger isn’t central to the government’s case, then ending the merger and splitting the company up probably isn’t on the table — at least according to Berchtold. Alternatively, if the government believes that the company’s use of exclusive ticketing contracts with venues is monopolistic, it could propose an even harsher penalty.
That’s because politicians like Senator Amy Klobuchar (D-Minn.), who chairs the anti-trust subcommittee in the Senate, have zeroed in on Ticketmaster’s 70-80% market share of the top 100 highest-grossing theaters, arenas and stadiums in North America. Klobuchar has repeatedly said she believes Ticketmaster uses exclusive contracts to lock up market share. In contrast, Ticketmaster attorneys and industry advocates have argued before that the exclusive nature of these contracts benefits venues because it simplifies the ticket-buying process for consumers and generates important revenue for venues that they would not earn without an exclusive agreement.
DOJ officials are also expected to argue that Live Nation has illegally abused its power in the concert business to drive up ticket prices over the last decade, in part through additional fees that can add as much as 30% to ticket prices.
But officials from Ticketmaster, which Live Nation controls, have long argued that artists set their ticket prices, not Ticketmaster, and that only a small percentage of the fees collected above face value go to the ticketing company, with the vast majority of those funds going to venues to help cover the costs of a concert.
The government also bears the burden of proving why its proposed remedies — like forcing Live Nation to sell its stake in Ticketmaster — would benefit consumers.
Simply being named in an antitrust lawsuit filed by Kanter has the potential to significantly damage Live Nation reputationally and financially. A detailed lawsuit against it could galvanize the company’s critics behind a narrative that alleges the concert conglomerate acts monopolistically and abuses its power, undoing the company’s efforts in recent years to improve its image and destigmatize its business model.
A lawsuit will also likely have a negative impact on the company’s share price and serve as a major distraction for Live Nation when it would otherwise be focused on strategic expansion following its most successful fiscal year ever, with revenue up 36% from the previous year and an impressive $1.8 billion in adjusted net income.
Instead, Live Nation may face the full weight of America’s top law enforcement agency, which this year has taken on companies like Apple and Google with market capitalizations that are each 100 times larger than Live Nation’s. While Kanter’s efforts against these companies have been applauded by powerful allies including Senator Amy Klobuchar (D-Minn.), who has vowed to “make antitrust sexy again,” Kanter’s efforts so far have been unsuccessful, with the DOJ losing the bulk of the major antitrust cases it has filed. In December 2022, a judge dismissed the DOJ’s efforts to block a merger between security firms Booze Allen Hamilton and Everwatch as well as mergers between UnitedHealth Group and Change Healthcare, U.S. Sugar Corp and Imperial Sugar, Meta and Within, and Microsoft and Activision.
Kanter also lost a major ruling in the DOJ’s antitrust case against Google earlier this year when a judge struck down a request to bar the tech giant from offering up evidence that activities the government had deemed anti-competitive also had positive qualities that improved the product and generated positive consumer feedback.
“If the government can tip the scales and prevent courts from considering pro-competitive effects, the government could win every case by default,” wrote Sean Heather, a senior vp at the U.S. Chamber of Commerce, in a recent paper on the Google case.
The Google litigation, which deals with ongoing business practices at the company as opposed to a merger, could be a litmus test for a yet-to-be-filed Live Nation suit. In the Google case, the government alleges that the company controls 90% of the online search advertising market by paying out billions of dollars each year to companies like Apple and Samsung to be the default search engine on their computers and smartphones.
While Live Nation officials are confident they can prevail in the looming antitrust case, they will do so with far fewer resources than other companies hauled before the Justice Department in recent years. Live Nation’s market cap currently sits at $22 billion, whereas Google and Apple’s combined market cap is $6.7 trillion, making Live Nation one of the smallest companies in recent decades to be the subject of such a lawsuit.
Live Nation declined to comment for this story. The Department of Justice did not respond to requests for comment.
The U.S. Department of Justice is planning to sue Live Nation over alleged violations of federal antitrust laws, according to a report by the Wall Street Journal.
A lawsuit will be filed within weeks that alleges the concert giant leveraged its dominance over the live music industry to undermine competition for ticketing, the Journal reported Tuesday, citing people familiar with the matter. Few other details about the planned case were revealed.
Live Nation has faced widespread criticism from angry fans and lawmakers since its botched handling of Taylor Swift’s “Eras” tour in 2022. Days after the incident, news broke that the DOJ had already been investigating Live Nation for months over potential antitrust violations.
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Representatives for Live Nation and the DOJ did not immediately return requests for comment from Billboard.
Since Live Nation and Ticketmaster merged in 2010, the company has long faced criticism that it exerts an unfair dominance over the market for live concerts. The DOJ approved the merger at the time, but imposed a so-called consent decree designed to prevent the company from abusing its position. Those restrictions were set to expire in 2020, but they were extended by five years after the DOJ accused Live Nation of repeatedly violating the decree.
That same criticism resurfaced in late 2022 with the disastrous roll out of tickets to Swift’s tour, which saw widespread service delays and website crashes as millions of fans tried – and many failed – to buy tickets. Live Nation pinned the blame on a “staggering number of bot attacks,” but lawmakers quickly argued that the incident was the result of a market dominated by one company.
“Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services,” said Sen. Amy Klobuchar (D-Minn.), the chair of the Senate subcommittee for antitrust issues.
In December 2022, the New York Times reported that DOJ had already been investigating Live Nation for months before the Swift debacle, including reaching out to venues across the country to ask about the company’s conduct. A year later, Reuters reported that the probe was ongoing, with federal investigators focusing on whether Live Nation imposed anticompetitive agreements on venues.
Last year, Live Nation hired Dan Wall, a veteran competition attorney who previously headed the antitrust practice at the law firm Latham & Watkins, as an executive vice president for corporate and regulatory affairs. In a blog post last month, Wall publicly defended the company against allegations similar to those that could be coming in the DOJ’s lawsuit, arguing that ticket prices were set by artists and driven up by the forces of supply and demand.
“In the ongoing antitrust attacks on Live Nation and Ticketmaster, a constant theme is that their alleged ‘monopolies’ are responsible for high ticket prices,” Wall wrote. “Rhetorically, that’s understandable, because if you want to rile up fans against Live Nation and Ticketmaster, there is no better way than to blame them for something you know fans dislike.”
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The five former police officers involved in the death of Memphis man Tyre Nichols have been officially indicted by a federal grand jury.
On Tuesday (September 12th), the Justice Department announced that the five former Memphis Police Department officers were indicted on four federal criminal charges in relation to the 29-year-old Black man after he was assaulted on January 7th, accusing them of violating his civil rights. “Tyre Nichols should be alive today. No one in this country should have to bury a loved one because of police violence,” said Kristin Clarke, head of the civil rights division of the Justice Department.
The four counts consist of two counts of deprivation of rights under color of law. The grand jury concluded that the officers – Tadarrius Bean, Demetrius Haley, Emmitt Martin III, Desmond Mills Jr., and Justin Smith – unlawfully assaulted Tyre Nichols and then refused to disclose his injuries to medical responders and willfully refused him medical aid. Nichols would die three days later in the hospital due to injuries sustained from the brutal beating inflicted on him. Those two counts could carry a sentence of life in prison if convicted for each defendant. The other two counts of witness tampering and obstruction carry a potential sentence of up to 20 years in prison.
The federal charges are separate from the charges brought by Tennessee state prosecutors against the former officers, who are also Black. Those charges of second-degree murder, aggravated assault, and official misconduct came after the five were fired and barred from working with law enforcement in the state. Memphis Police Department also disbanded the SCORPION unit they were attached to. The Shelby County District Attorney’s Office welcomed the federal charges, adding that the trials would likely intersect.
“We all heard Mr. Nichols cry out for his mother and say, ‘I’m just trying to go home.’” Said Attorney General Merrick Garland in a video statement before adding, “The Justice Department will continue to hold accountable officers who betray their oath.”
In a statement released to the press afterward, the Nichols family attorneys Ben Crump and Antonio Romanucci said of the indictments: “We applaud AG Garland and Assistant AG Clarke for their tireless efforts to create federal accountability for these officers who were selected to be part of the Memphis Police Department’s SCORPION unit and savagely ended Tyre’s life, setting a critical precedent for accountability and justice.”
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