The Biden administration, 29 states and the District of Columbia will partner with a powerful company in charge of booking and selling tickets for large concerts.
In a major lawsuit filed Wednesday, the Department of Justice and 30 state and local attorneys general accused Live Nation and its subsidiary Ticketmaster of monopolizing the live entertainment industry, harming artists and their fans in the process.
Here’s what you need to know about the lawsuit and why Live Nation is in trouble.
What is Live Nation being accused of?
The lawsuit alleges that Live Nation “engaged in various forms of anti-competitive conduct, including acquiring competitors, retaliating against venues that partnered with competitors, preventing venues from using multiple ticket sellers, and restricting artists’ use of its venues.”
According to the complaint, Ticketmaster’s long-term exclusive contracts with venues are at the heart of Live Nation’s “squeezing of the live concert industry,” with the company having been the sole provider of primary ticketing services at venues for years. It has become.
The lawsuit alleges that Live Nation has repeatedly acquired amphitheaters, festivals, other venues, fellow promoters and smaller ticket sellers in an effort to cripple its rivals.
As the company has increased control over venues, it has also increased its influence over artists, who must hire the company as a concert promoter for their tours if they want access to a venue, according to the complaint. That’s what it means.
As of 2023, Live Nation manages more than 60 of the top 100 outdoor venues in the United States and controls approximately 80% of prime ticket sales at major concert venues through Ticketmaster.
The Justice Department said in its lawsuit that Live Nation’s closest competitor in concert promotion, AEG, is less than half the size and that its “competitive importance has been overstated.”
Live Nation said in a statement: “This lawsuit does not resolve issues that fans care about, including ticket prices, service fees, and access to popular performances.” “We will continue to use this to shine a light on the industry and push for reforms that truly protect consumers and artists.”
Additional charges will be “Ticketmaster tax.”‘
According to the lawsuit, fans pay more for live music tickets in the United States than anywhere else in the world.
The Justice Department described a “constant drumbeat” of “public discontent” caused by added costs for services, facilities and payment processing fees that it dubbed the “Ticketmaster Tax” and inflated ticket prices.
Ticketmaster adopted all-in pricing last year, which displays the full ticket price plus processing fees up front, but these additional costs could ultimately increase the base price of tickets.
“Live music should not be available only to those who can afford to pay the Ticketmaster tax,” Assistant Attorney General for the Antitrust Division Jonathan Cantor said at a press conference Thursday.
“We are here today to fight for the competition so we can reopen the doors to the live music industry to everyone,” he added.
Live Nation said the Justice Department’s lawsuit is against live entertainment companies, including the fact that a large portion of service fees are paid to venues and that competition has steadily eroded Ticketmaster’s market share and profit margins. “It ignores basic economics.”
Artist options are limited unless you use Live Nation
When artists plan tours, Live Nation’s dominance of the live entertainment and ticketing industries makes it difficult for artists to plan tours without leveraging the entertainment giant’s network, the Justice Department said. He said that could limit artists’ options and potentially force Live Nation to shut out artists who want to tour. Collaborate with other vendors.
For more than a decade, Live Nation has blocked access to its venues to artists who choose third-party promoters, according to the Department of Justice.
“In other words, if an artist wishes to use a Live Nation venue as part of a tour, that artist must contract with Live Nation to promote the tour’s concerts,” the complaint states.
Because Live Nation controls 40 of the nation’s top 50 outdoor theaters and controls more than 70% of the promotion of concerts at large outdoor theaters, the Department of Justice has ruled that “artists cannot perform outdoors without Live Nation.” It is almost impossible to plan a tour that includes theater performances.”
Because Live Nation manages music venues, it works with some of the biggest artists in the world as well as up-and-coming talent.
This could make it easier to direct artists to Live Nation’s network of venues as their fan base grows, but it could also reduce artists’ negotiating power, according to the lawsuit.
Part of Biden’s broader crackdown on corporate power and junk fees
The antitrust lawsuits against industry giants come amid a broader effort by the Biden administration to crack down on corporate power and so-called junk fees.
“Today’s announcement reflects the Department of Justice’s latest efforts to combat corporate misconduct,” said Deputy Attorney General Lisa Monaco.
“From day one of this Administration, we have prioritized holding the most serious corporate wrongdoers accountable, from bribe payers to money launderers to price fixers,” she continued. “Our fight against corporate wrongdoing includes a focus on anti-competitive behavior that harms consumers, workers, and businesses of all kinds.”
Earlier this year, the Justice Department and 16 states sued Apple, accusing the tech giant of maintaining a smartphone monopoly. The Federal Trade Commission (FTC) and 17 states also sued Amazon last fall, alleging anticompetitive conduct in its treatment of shoppers and third-party sellers.
The Biden administration is also seeking to crack down on “junk fees” across many industries, including by capping late fees on credit cards, requiring broadband providers to clearly display “all-in” prices and requiring airlines to prepay baggage and change fees.
Live Nation’s Lobbying Onslaught
Before the lawsuit, Live Nation tried to quell the backlash from D.C. through expensive lobbying efforts.
Live Nation more than doubled its federal lobbying spending from $1.1 million in 2022 to $2.4 million in 2023, and the entertainment giant spent an additional $520,000 in the first quarter of 2024, according to The Hill’s analysis of federal disclosures.
Live Nation and its hired guns reportedly lobbied Congress on several bills that were introduced after the Eraser Tour debacle. These bills include the Major Event Ticketing Price Transparency Act, also known as the Tickets Act. The House of Representatives passed the Tickets Act last week with the goal of promoting pricing transparency.
Live Nation lobbyists have argued that there is intense competition in the concert promotion industry and ticket resale market, pointing to a “vast gap” in quality between Ticketmaster’s ticket sales services and its closest competitors. Antitrust advocates argue that Live Nation’s dominance of the industry has helped create that gap.
“The Department of Justice is doing the right thing. It is long past time to break up Live Nation/Ticketmaster. Hidden fees, poor service, and stifling competition are all bad for fans. The Senate Judiciary hearings set the stage. Now we need to get this done.” Senator Amy Klobuchar said: (D-MN) serves as chairman of the Senate Judiciary Committee’s Competition Policy, Antitrust, and Consumer Rights Subcommittee, which held a hearing in January 2023 on competition in the live entertainment and ticket sales industries.
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