Ticketmaster Stumps All: Investigating Antitrust Violations in the Entertainment Industry

By Shahana Banerjee

Shahana Banerjee is a junior in the College of Arts and Sciences at the University of Pennsylvania majoring in Health and Societies. She is interested in healthcare policy, privacy and technology, and intellectual property law. 
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On November 15, 2022, millions of Taylor Swift fans assembled in the Ticketmaster queue, anxiously awaiting their chance to purchase tickets for Swift’s The Eras Tour, her first tour in six years since 2018’s “Reputation.” Despite this being Swift’s largest tour ever with more than 50 North American shows scheduled, eager fans were left disappointed with a crashed website and extra-long wait times. Live Nation, the concert promotion company which merged with Ticketmaster in 2010, has faced continued criticism for its monopoly-like power in the entertainment industry since the merger. Activists have argued that Ticketmaster hosts 70% of the ticketing and live venue events, leaving minimal room for competition [1]. Liberty Media’s CEO Greg Maffei, the largest shareholder in Live Nation, reported that Ticketmaster had given 1.5 million “verified” Swift fans access to the pre-sale of the tour whereas 14 million users, including bots, managed to swarm into the queue. Despite the website crashing, 2 million tickets were sold during the tour’s presales ahead of the general sale, which was eventually canceled.

Maffei defended allegations that Live Nation and Ticketmaster have been abusing their power in the industry since their 2010 merger, particularly after politicians including Representative Alexandria Ocasio-Cortez (D-NY) publicly criticized the merger and suggested that it be broken up. Maffei responded, “[t]hough AOC may not like every element of our business, interestingly, AEG, our competitor, who is the promoter for Taylor Swift, chose to use us because, in reality, we are the largest and most effective ticket seller in the world.. Even our competitors want to come on our platform [1, 2].”

Following the debacle that stormed outrage across social media and news outlets, Ticketmaster issued an apology stating that “the biggest venues and artists turn to [them] because [they] have the leading ticketing technology in the world – that doesn’t mean it’s perfect, and clearly for Taylor Swift | The Eras Tour onsale it wasn’t. But [they’re] always working to improve the ticket buying experience. Especially for high demand onsales, which continue to test new limits [3].” Despite the apology that fell short and felt lackluster to millions of Swift’s fans, the Department of Justice has now begun an investigation into Live Nation Entertainment – Ticketmaster’s parent company – on the account of potential antitrust violations, one of the reasons being dynamic pricing. This new pricing system that has attracted antitrust criticism, evident in artist tours of Bruce Springsteen, Harry Styles, Taylor Swift, and others, sets prices based on demand, i.e. the higher the number of fans waiting in the queue, the higher the ticket prices amount to. It paves the way for more profits into the pockets of popstars rather than scalpers, while leaving fans at the mercy of ballooning costs [4].

Members of the Justice Department’s antitrust division have contacted music venues and stakeholders in the ticketing industry, delving into Live Nation’s practices and the general industry dynamic. While the investigation remains highly sensitive, the DOJ’s inquiry remains broad and aims to answer the question of whether the company maintains a monopoly over the industry. Initiatives for assessing the boundaries of American antitrust law have been pushed from the Biden administration over the last two years, as the DOJ and Federal Trade Commission have blocked mergers and acquisitions of companies across multiple industries. When the Justice Department approved the Live Nation–Ticketmaster merger in 2010, it issued a settlement that prohibited Live Nation to threaten entertainment venues with losing access to its hosted tours if said venues decided to use ticketing avenues that were not Ticketmaster. These terms were set to end in 2020, a decade after the merger emerged. DOJ members plan to look into whether Live Nation has complied with the agreement and its amendments in the new inquiry, as they have become increasingly circumspect of the settlements, believing that the most efficient way to resolve antitrust affairs is through company structural change [5].

In response to the news of the Justice Department opening an investigation into Live Nation, the company responded that it “takes its responsibilities under the antitrust laws seriously and does not engage in behaviors that could justify antitrust litigation, let alone orders that would require it to alter fundamental business practices.” As of now, their defense seems to rely on the pre-existing competitive nature of concert promotions and the growing demand for live entertainment. In their statement, they made it clear that the DOJ itself had recognized this dynamic of the industry during the 2010 merger, which has not changed since [6]. 

US Senators Richard Blumenthal (D-CT), Amy Klobuchar (D-MN), and Edward J. Markey (D-MA) have publicly shown support for the DOJ’s intention for inquiry but have also urged the Department to protect consumers and artists to a more permanent degree. If the investigation were to find Live Nation abusing its dominance in the industry, the Senators will urge the breakup of the company in order to restore competition in the ticketing business, especially after the Department’s past efforts failed to protect competition [7]. 

The Eras Tour failure, an example of tremendous demand for a highly demanded commodity in limited supply, has intensified the complaints already present in Washington’s antitrust forum and the music industry. It has rather amplified how Live Nation’s power has continually restrained competition and injured consumers. Artists, live entertainment venues, and fans should not be under the heel of one singular seller, and the Department’s considerations hold hope that consumers and the market can rid of the monopoly that Ticketmaster holds.

Bibliography

[1] Whitten, Sarah. “Ticketmaster's Largest Shareholder Blames Massive Demand − Including from Bots − for Taylor Swift Ticket Fiasco.” CNBC. CNBC, November 17, 2022. https://www.cnbc.com/2022/11/17/taylor-swift-ticketmaster-fiasco-due-to-demand-bots-liberty-media-ceo-says.html. 
[2] Dellatto, Marisa. “14 Million People Tried to Buy Taylor Swift Pre-Sale Tickets, Live Nation Chair Says.” Forbes. Forbes Magazine, November 18, 2022. https://www.forbes.com/sites/marisadellatto/2022/11/17/14-million-people-tried-to-buy-taylor-swift-pre-sale-tickets-live-nation-chair-says/?sh=ceb5dd435dd5. 
[3] “Taylor Swift: The Eras Tour Onsale Explained.” Ticketmaster, November 19, 2022. https://business.ticketmaster.com/business-solutions/taylor-swift-the-eras-tour-onsale-explained/. 
[4] “Best of: Does Ticketmaster Have a Monopoly on Live Events?” NPR. NPR, November 22, 2022. https://www.npr.org/2022/11/22/1138693632/best-of-does-ticketmaster-have-a-monopoly-on-live-events. 
[5] Mccabe, David, and Ben Sisario. “Justice Dept. Is Said to Investigate Ticketmaster's Parent Company.” The New York Times. The New York Times, November 18, 2022. https://www.nytimes.com/2022/11/18/technology/live-nation-ticketmaster-investigation-taylor-swift.html. 
[6] “A Statement from Live Nation Entertainment.” Live Nation Entertainment, November 19, 2022. https://www.livenationentertainment.com/2022/11/a-statement-from-live-nation-entertainment-2/. 
[7] “Blumenthal, Klobuchar & Markey Urge DOJ to Hold Ticketmaster-Live Nation Accountable for Failing Consumers: U.S. Senator Richard Blumenthal of Connecticut.” U.S. Senator Richard Blumenthal, November 21, 2022. https://www.blumenthal.senate.gov/newsroom/press/release/blumenthal-klobuchar-and-markey-urge-doj-to-hold-ticketmaster-live-nation-accountable-for-failing-consumers. 
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The opinions and views expressed in this publication are the opinions of the designated authors and do not reflect the opinions or views of the Penn Undergraduate Law Journal, our staff, or our clients.