The United States Department of Justice (DOJ) does appear to be looking into Ticketmaster over potential antitrust violations. Earlier this month, multiple news outlets reported that the DOJ had opened an antitrust investigation into Live Nation Entertainment, Ticketmaster’s parent company.
What prompted the DOJ investigation into Ticketmaster?
There are a few factors that likely prompted the DOJ to open an antitrust investigation into Ticketmaster and Live Nation:
- Ticketmaster’s dominance of the primary ticket sales market – Ticketmaster sells tickets for the vast majority of major concerts and live events in the US.
- Complaints over high fees – Ticketmaster has faced growing criticism for add-on fees that can often add more than 30% to the base ticket price.
- Scrutiny after the Taylor Swift fiasco – Ticketmaster faced intense scrutiny in November 2022 when its site crashed during presales for Taylor Swift’s upcoming stadium tour. The incident renewed criticism of Ticketmaster’s market power.
- Calls from politicians – Some politicians, such as Senator Amy Klobuchar, chair of the Senate Judiciary antitrust panel, had called for an investigation into Ticketmaster prior to the DOJ’s announcement.
The DOJ likely felt that the combination of Ticketmaster’s dominance, rising fees, high-profile failures, and political pressure warranted opening a formal investigation into potential antitrust violations.
What are the details of the DOJ investigation?
The DOJ has not released many specifics about its antitrust investigation into Ticketmaster and Live Nation. However, here is what we know so far:
- Investigation opened in September 2022 – The DOJ first opened its investigation in September 2022, according to multiple reports.
- Reviewing Live Nation’s 2010 merger – A key focus seems to be Live Nation’s 2010 merger with Ticketmaster, which combined the world’s largest concert promoter with the biggest ticket sales company.
- Potential violations of merger terms – The DOJ seems to be looking into whether Live Nation has abused its market power in violation of the terms of its 2010 merger agreement.
- Requests for information sent – The DOJ has sent requests for information to music venues and players in the live entertainment industry as part of its investigation.
While the exact details are still unclear, it appears the DOJ is taking a close look at whether the Live Nation-Ticketmaster merger has helped create an unfair monopoly in the live events market.
What anti-competitive behavior could the DOJ look at with Ticketmaster?
There are a few areas of potentially anti-competitive behavior that the DOJ may look at in its antitrust investigation into Ticketmaster:
- Exclusive ticketing deals – Ticketmaster has exclusive ticket sales rights with many major venues and promoters. This locks out competitors.
- Predatory pricing – Ticketmaster has been accused of undercutting competitors’ prices until they go out of business.
- Bundling – Ticketmaster requires venues to use its ticketing platform and reseller services under bundled deals.
- Abuse of market position – Critics say Ticketmaster exploits its market dominance through high fees and poor customer service.
By investigating these areas, the DOJ likely hopes to determine if Ticketmaster has engaged in illegal monopoly behavior toedge out competitors and extract higher prices.
What penalties could Ticketmaster face if violations are found?
If the DOJ investigation does uncover antitrust violations by Ticketmaster or Live Nation, there are a few potential penalties they could face:
- Civil fines – The DOJ could seek civil fines and monetary damages from Ticketmaster to punish past bad behavior.
- Breaking up the company – In an extreme case, the DOJ could push to break up Live Nation and Ticketmaster into separate companies again.
- Behavioral remedies – More likely, the DOJ could seek a settlement that requires Ticketmaster to change its business practices in ways that promote more competition.
- Ongoing monitoring – Any settlement would likely come with ongoing DOJ monitoring to ensure Ticketmaster complies with the terms.
Fines and business practice changes seem the most plausible outcome if violations are proven. However, the threat of breaking up the merged company will likely pressure Ticketmaster to agree to remedies.
How has Ticketmaster responded to the DOJ investigation?
Ticketmaster has offered limited public comments on the DOJ antitrust investigation to date. In general, the company’s response has been:
- Denying anti-competitive practices – Ticketmaster states that it competes fairly in a highly competitive ticketing market.
- Pledging cooperation – The company says it is cooperating fully with the DOJ investigation.
- Downplaying investigation – Ticketmaster notes that similar DOJ reviews in the past did not lead to enforcement action.
Behind closed doors, Ticketmaster is likely taking the DOJ investigation very seriously and preparing for a potential legal battle. But publicly, Ticketmaster is projecting confidence and minimizing the scrutiny.
Could the DOJ investigation impact the Ticketmaster-Live Nation merger?
It’s unlikely the DOJ investigation alone could lead to an outright reversal of the Ticketmaster-Live Nation merger at this stage. However, there are a couple ways the DOJ probe could potentially impact the merged entity:
- It could force changes to business practices – If anti-competitive abuses are uncovered, the DOJ could force Ticketmaster to change its exclusive deals, bundling, pricing, etc.
- It could result in fines or monitoring – Any settlement with the DOJ would likely involve fines, consent decrees, and ongoing monitoring of Ticketmaster’s conduct.
- It could lead to a future breakup push – If problems persist, the DOJ or other parties could potentially mount a renewed push to break up Ticketmaster and Live Nation down the road.
Realistically, wholesale reversal of the merger is unlikely. But the DOJ investigation could still significantly alter the Ticketmaster/Live Nation business model if violations are exposed.
What will happen next in the Ticketmaster investigation?
It’s difficult to predict exactly what will happen next in the DOJ’s Ticketmaster antitrust investigation. However, we can expect a few next steps:
- More requests for information – The DOJ will likely continue issuing requests for documents, communication records, and other information as it gathers evidence.
- Executive interviews – DOJ officials will probably conduct interviews with key executives at Ticketmaster and Live Nation.
- Industry impacted interviews – The DOJ may also interview players across the live entertainment industry to gauge Ticketmaster’s market power.
- Assessing evidence – DOJ attorneys will take some time to assess all the evidence they gather through these efforts.
- Action or settlement – Finally, the DOJ will either file an antitrust lawsuit against Ticketmaster or seek a pre-trial settlement agreement.
The investigation process will likely take many months to play out. But increased pressure on Ticketmaster seems inevitable as the DOJ probe continues.
Conclusion
The DOJ has opened a formal antitrust investigation into Ticketmaster and its parent company Live Nation. While the details are still developing, the probe seems focused on determining if Ticketmaster’s dominant market position allows it to engage in anti-competitive and monopolistic behavior. Potential violations could lead to civil fines, business practice remedies, and consent decrees with ongoing DOJ monitoring. Wholesale reversal of the Ticketmaster-Live Nation merger is less likely in the near term. But the DOJ investigation will significantly increase pressure on the combined entertainment giant moving forward.
