Ticketmaster, the largest ticket sales and distribution company in the United States, is facing multiple lawsuits over allegations of anti-competitive practices. Ticketmaster has dominated the primary ticket sales market for major entertainment events for over a decade and now faces accusations that it has abused its position to charge higher fees and squeeze out competitors.
Excessive Fees
One of the main complaints against Ticketmaster is that it charges excessive fees to customers purchasing tickets. Ticketmaster acts as an intermediary between venues/event organizers and ticket buyers. In this role, Ticketmaster tacks on large processing and service fees to every ticket purchased on its platform. These fees can sometimes exceed 30% or more of the base ticket price. Critics argue these fees are exorbitant and can make attending events prohibitively expensive.
Ticketmaster claims the fees are justified to cover its operating costs, technology investments, overhead, and promotional costs. However, some lawsuits counter that Ticketmaster uses its dominance in primary ticket sales to impose fees far higher than its true costs. There are also complaints that Ticketmaster purposefully makes the full costs opaque until late in the purchasing process, misleading consumers.
Restricting Access to Tickets
Another common allegation is that Ticketmaster has agreements with venues and organizers to be the exclusive seller of the initial batch of tickets for events. This restricts the public’s access to first-sale tickets and forces them to purchase through Ticketmaster. Critics say this allows Ticketmaster to impose higher fees than if there was a competitive market for primary ticket sales.
Ticketmaster utilizes pre-sales and complex timing of ticket releases to maintain its exclusive access. Lawsuits claim this conduct serves to quash competition and Funnels consumers to Ticketmaster’s platform, where they have no choice but to pay the high fees.
Reselling Tickets through Subsidiaries
There is also controversy around Ticketmaster’s relationship with its subsidiary ticket resellers like Vivid Seats and GetMeIn. Ticketmaster has been accused of colluding with these resellers to manipulate ticket supplies and pressure consumers into paying higher prices.
For example, critics claim Ticketmaster holds back tickets during initial sales, only to release them later through its reseller sites at inflated prices. Lawsuits allege Ticketmaster doubles dips by charging fees both on initial sales and resales.
Abuse of Market Position
Together, the claims above form the basis for allegations that Ticketmaster illegitimately uses its market dominance to extract high fees and limit consumer choice. Multiple lawsuits claim these actions constitute anti-competitive conduct in violation of antitrust laws.
Ticketmaster currently faces two major class action lawsuits in Canada and the United States alleging anti-competitive practices. The company is accused of exploiting its position as the primary access point between venues, promoters, and fans to charge exorbitant fees that would not exist in a properly competitive market.
Responses by Ticketmaster
Ticketmaster has denied the allegations in the lawsuits and defended its practices. Some of Ticketmaster’s key responses include:
- Fees are clearly disclosed to customers and are reasonable payments for Ticketmaster’s services.
- Exclusive ticket selling agreements with venues and promoters are mutually beneficial arrangements that reward Ticketmaster for its platform investments.
- There is no improper coordination between Ticketmaster’s primary and resale ticket services.
- Tickets on its resale sites reflect fair market prices based on supply and demand.
Ticketmaster argues its services provide convenience and order to a complex ticketing marketplace. They claim allegations of anti-competitive misconduct are unfounded.
Potential Outcomes
If the class action lawsuits succeed, Ticketmaster could face:
- Court orders to change its contracting and selling practices
- Restraints on the fees and prices it charges
- Fines and monetary damages
However, litigation is lengthy and outcomes uncertain. Ticketmaster has settled some previous lawsuits over similar claims while successfully defending against others. Any court ruling would likely be appealed as well. Proving anti-competitive antitrust violations can also be legally challenging.
Nonetheless, the lawsuits represent a major challenge to Ticketmaster’s dominant position in event ticketing. Any reforms or constraints imposed by courts could significantly shake up the industry’s business model. The cases underscore the tensions between Ticketmaster’s status as a market leader and accusations of monopoly power abuse from consumers and regulators.
Conclusion
The pending lawsuits against Ticketmaster allege the company illegally uses its market power to charge excessive fees and restrict ticket availability. Key claims include imposing fees higher than justified, tying up tickets through exclusive sales agreements, and manipulating supplies between initial sales and resales. The cases accuse Ticketmaster of anti-competitive conduct in violation of antitrust laws. Ticketmaster denies these allegations and defends its practices as reasonable platform costs and mutually beneficial business arrangements. How the courts ultimately rule could have major implications for the future of Ticktemaster’s dominance in event ticketing.
