In recent months, Ticketmaster has faced growing public scrutiny over its ticketing practices. The company, which dominates the ticket sales market in the United States, was accused of exploiting its position through exorbitant fees and other anti-competitive actions. This has led many to wonder: is the government taking action against Ticketmaster?
What are the main allegations against Ticketmaster?
The core allegations against Ticketmaster are:
- Imposing excessive hidden fees that can more than double advertised ticket prices
- Pressuring venues into using Ticketmaster exclusively through anti-competitive lock-in deals
- Using its market dominance to engage in predatory and monopolistic practices
- Failing to take sufficient action to combat scalpers and ticket bots that snap up tickets
These actions prevent a fair and competitive ticketing market, critics argue, as Ticketmaster faces little pressure to lower fees or innovate its business. The company has repeatedly come under fire from politicians, consumer groups, venues and artists over its practices.
What sparked the latest public outrage?
The most recent wave of outrage stemmed from Ticketmaster’s handling of ticket sales for Taylor Swift’s upcoming Eras tour. In November 2022, millions of fans tried to purchase pre-sale tickets but were met with massive delays, website outages, and error messages on Ticketmaster.
Despite high demand, Ticketmaster’s site was unable to handle the pre-sale activity. No tickets were then released for the general public sale, as the pre-sales had already sold out the available inventory.
Fans blamed Ticketmaster’s lack of readiness and its monopoly over ticketing. Politicians including Alexandria Ocasio-Cortez and Richard Blumenthal publicly criticized the company in response.
Have there been any government investigations into Ticketmaster before?
Yes, Ticketmaster has been subject to antitrust investigations by the Department of Justice in the past, focused on its monopolistic business practices.
1994 Investigation
In 1994, the DOJ filed an antitrust lawsuit seeking to break up Ticketmaster’s monopoly. The government asserted the company was unlawfully using exclusive deals with venues to block competition and exploit consumers.
Ticketmaster settled the case in 1995, agreeing to license its technology to rivals and refrain from exclusive contracts. But many felt the settlement did not go far enough in addressing Ticketmaster’s market power.
2009 Investigation
The DOJ again investigated Ticketmaster in 2009, when it proposed a merger with Live Nation. The government reviewed whether combining the nation’s dominant ticketing company with its largest concert promoter would unfairly crush competition.
It eventually approved the merger in 2010 under provisions meant to preserve competition. But the deal proved controversial, with ongoing criticisms that it allowed Ticketmaster-Live Nation to become too dominant of a force in the industry.
Is the government investigating Ticketmaster now?
Currently, there are no publicly confirmed federal investigations into Ticketmaster regarding the issues that recently surfaced. However, growing public pressure may spur new scrutiny from government regulators.
Some lawmakers have already called for an antitrust investigation into the company’s practices, including Sen. Richard Blumenthal and Rep. Bill Pascrell. Pascrell wrote a letter to the DOJ in November demanding an investigation into possible abuse of power and antitrust violations.
The DOJ and Federal Trade Commission have broad authority to probe potential antitrust violations and anti-competitive conduct. An investigation into Ticketmaster could re-examine the effectiveness of the Live Nation merger settlement and whether the company has renewed monopolistic practices.
What would a new antitrust investigation examine?
If the DOJ or FTC open a new probe, some areas they may examine include:
- Exclusive contracts: Whether Ticketmaster’s exclusive agreements with venues lock out competitors.
- Market power: Ticketmaster’s dominant market share and power over pricing.
- Fees: Whether Ticketmaster’s add-on fees are excessive or abusive.
- Scalping: If Ticketmaster has done enough to prevent scalping and bot activity.
- Consumer harm: How consumers are harmed through inflated prices and lack of choices.
- Merger conditions: If the Live Nation merger settlement terms have been violated.
Investigators have various laws at their disposal for probing antitrust issues, including the Sherman Act, Clayton Act, and Federal Trade Commission Act.
What parties could be involved in an investigation?
A federal antitrust investigation would likely involve:
- Department of Justice and/or Federal Trade Commission: The DOJ and FTC share federal antitrust enforcement duties.
- Ticketmaster: Key executives and internal data.
- Live Nation Entertainment: As Ticketmaster’s parent company.
- Venues, concert promoters, artists
- Consumer protection groups
- Ticket resale platforms
- Competitors: Other ticket sales companies.
Investigators have wide authority to issue subpoenas and civil investigative demands to access company records and correspondence. They can also compel testimony and interviews with key figures.
What are the outcomes if an antitrust violation is found?
If regulators determine Ticketmaster violated antitrust laws, possible outcomes include:
- Forced divestitures: Ticketmaster could be forced to divest assets, like selling off all or part of its ticketing business.
- Business model changes: Ticketmaster could be required to alter anti-competitive practices related to exclusive deals, fees, etc.
- Financial penalties: Regulators can impose heavy fines, potentially tens of millions of dollars or more.
- Consent orders: Ticketmaster may have to abide by conditions set by regulators, as happened with the Live Nation merger.
- Blocked mergers: Any future Ticketmaster mergers and acquisitions could face scrutiny.
Structural changes like divestitures seek to open the market to more competition. Behavioral remedies like consent orders aim to curb anti-competitive actions. Fines and penalties impose financial consequences for violations.
What has Ticketmaster said in response to the public criticism?
Ticketmaster has defended itself against the widespread criticism, blaming the Taylor Swift tour pre-sale issues on high demand and bot attacks rather than its own business practices.
In a statement, the company said it took proactive measures to manage the demand, including using Verified Fan and other tools. But it noted Taylor Swift has hugely popular pre-sales that outpace supply.
The company argued it does not set ticket prices or service fees, and said the fees cover its investments and costs to service clients. It dismissed notions of antitrust violations as unfounded.
Ticketmaster also stated the Live Nation merger has benefited consumers by growing event choices, even while its market share has dropped. Critics counter that the online ticket sales market remains overwhelmingly dominated by Ticketmaster.
What impact could an investigation have?
A federal antitrust probe into Ticketmaster has the potential to significantly shake up the ticketing industry depending on its outcome. Even the opening of an investigation could pressure Ticketmaster to adjust policies.
If an enforcement action is pursued, it could challenge Ticketmaster’s entrenched market position by opening the door to more competition. Ticket availability and pricing could be positively impacted.
However, breaking up Ticketmaster or undoing the Live Nation merger would be complex endeavors fraught with difficulties. Live entertainment is a multi-billion dollar global industry in which demand greatly outstrips supply for top shows.
Reforms may still leave outstanding issues like bot scalping activity if the core problem is scarcity of popular tickets. There are also risks of disrupting efficiencies if the ticketing market becomes overly fragmented.
Ultimately, the impact depends on regulators properly diagnosing areas of abuse versus components functioning appropriately in a supply-constrained industry. But greater scrutiny could bring much-needed transparency and consumer benefits.
Conclusion
Ticketmaster is facing growing public calls for scrutiny over its dominant market position in ticketing. While a federal antitrust investigation has not been confirmed, the company may well be subjected to a probe in the wake of criticism over its practices. Examining issues around fees, exclusive deals, mergers, and consumer harm will be central areas of focus. An enforcement action could seek to open the market through penalties, divestitures, or imposing conditions on Ticketmaster. Even without a breakup, positive changes could emerge such as lower prices and more innovation if regulators succeed in fostering greater competition. But undertaking meaningful reform in a supply-limited industry also has risks and challenges. The outcome of any potential probe remains highly uncertain for now, but would have major ramifications given Ticketmaster’s vast role in live event ticketing.
