In November 2022, Ticketmaster faced intense scrutiny over its handling of ticket sales for Taylor Swift’s Eras tour. The presale was plagued by long wait times, website outages, and rapid sellouts that left many fans without tickets. In the aftermath, Ticketmaster canceled the general public sale due to insufficient remaining ticket inventory.
The botched rollout prompted outrage from fans and caught the attention of politicians. In January 2023, the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights held a hearing to investigate Ticketmaster’s practices and market power in the live event ticketing industry.
What prompted the Senate hearing?
The Ticketmaster controversy highlighted longstanding concerns about lack of competition in ticketing. Ticketmaster is the dominant primary ticket provider in the U.S., with some estimates putting its market share around 70%. The company merged with Live Nation in 2010, combining the largest ticketing company with the largest concert promoter, over the objections of the Justice Department.
Critics have accused Ticketmaster of monopolistic behavior that harms consumers through high fees and poor service. There have been repeated calls for better oversight and enforcement of antitrust laws in ticketing. The debacle over Taylor Swift tickets brought these issues to the political foreground.
Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT) announced the hearing to investigate Ticketmaster’s market position and the state of competition in ticketing. They expressed concern about the lack of choices and transparency for consumers in the ticketing market.
Who testified at the hearing?
The hearing featured testimony from the following witnesses:
- Joe Berchtold, President and CFO of Live Nation Entertainment, Ticketmaster’s parent company
- SeatGeek co-founder Jack Groetzinger, representing competitor ticketing platforms
- Jerry Mickelson, CEO of Chicago-based concert promoter Jam Productions
- Clyde Lawrence, a musician who advocates for artist and fan rights
Berchtold defended Ticketmaster’s practices and market share advantage as the result of investments, innovation, and serving clients well. He stated most events chose Ticketmaster voluntarily for their service capabilities.
The other witnesses painted a different picture. They argued Ticketmaster faces inadequate competition, engages in anticompetitive behavior, and harms consumers through high fees enabled by its market power. They pointed to examples like exclusive contracts and alleged retaliation against competitors.
What topics were discussed at the hearing?
Discussion focused on several key areas related to competition and consumer issues:
Ticket fees
Witnesses criticized Ticketmaster’s “egregious” fees that can add as much as 50% to ticket face prices. Berchtold claimed fees reflect the cost of providing services like ticket verification. Others argued Ticketmaster can get away with fees far exceeding costs due to lack of competition.
Market power
Berchtold stated Ticketmaster has under 30% market share when considering primary and secondary ticketing combined. But he acknowledged they are the primary ticketing leader. Critics argued Ticketmaster uses exclusive deals to dominate primary ticketing and exploit consumers.
Vertical integration
Ticketmaster’s 2010 merger with Live Nation created a vertically integrated company combining ticketing, concert promotion, artist management and more. Berchtold claimed this benefits consumers and fans. Opponents said it suppresses competition and facilitates conflicts of interest.
Consumer experience
Ticketmaster claimed to offer the best service through technology investments. But lawmakers and witnesses cited the Swift onsale as evidence that consumers get a raw deal. Fans experienced glitches, long waits and lack of customer service.
Transparency and oversight
Lawmakers pressed Live Nation about lack of transparency in areas like fees, algorithms and presale ticket allotments. Groetzinger argued for rules requiring more disclosure to hold dominant platforms accountable.
What actions did senators propose?
Committee members suggested several policy changes:
- Review antitrust consent decrees governing the Live Nation-Ticketmaster merger
- Pressure the DOJ to investigate competitive issues in ticketing
- Introduce consumer protection regulations for ticket fees, disclosures, etc.
- Outlaw use of ticket-buying bots which snapped up Swift tickets
Klobuchar and Lee intend to introduce bipartisan legislation to improve competition and transparency in ticketing. Proposals include:
- Disallowing exclusive ticketing contracts without venue consent
- Capping excessive ticketing fees
- Prohibiting retaliation against venues using other ticket companies
- Increasing event ticketing data disclosures
What was the outcome of the hearing?
The hearing put Ticketmaster’s practices in the spotlight and created momentum for tighter regulation and enforcement. While no immediate action resulted, the serious bipartisan scrutiny could pose real legal and PR troubles for Live Nation-Ticketmaster if allegations of anticompetitive behavior prompt investigations.
Berchtold’s defenses failed to satisfy lawmakers concerned about fairness and consumer choice. With legislators gearing up for antitrust reforms, the ticketing giant likely faces heightened oversight going forward.
While Live Nation expressed willingness to cooperate, meaningful policy change depends on Congress actually passing legislation. But the hearing demonstrated political will to address perceived monopoly power across industries including ticketing.
What are the larger implications?
Beyond ticketing, the hearing reflected growing pressure on tech giants and corporate consolidation across the economy. Lawmakers used the Swift fiasco to spotlight common complaints about monopolistic conduct, lack of accountability and the pitfalls of vertical integration.
Like tech CEOs testifying before Congress, the Live Nation executive faced tough questions about stifling competition through acquisition strategies. Legislators cited Ticketmaster as symptomatic of economy-wide antitrust enforcement failures.
The bipartisan push for reforms also represents the broad political appeal of antitrust action to curb corporate power. Voters of all stripes resent feeling exploited by unaccountable big business interests like Ticketmaster.
Could legal action follow?
The Justice Department or Federal Trade Commission could open antitrust investigations into Live Nation-Ticketmaster’s competitive practices.
Alleged violations like coercive exclusive dealing, improper tied sales, or retaliation could prompt action if substantiated. Remedies could include:
- Unwinding the 2010 merger
- Prohibiting anticompetitive behaviors
- Mandating fair access for rival platforms
- Oversight of fees, algorithms and disclosures
Private plaintiffs also could bring antitrust suits alleging harm from Ticketmaster’s market dominance. Class actions could seek damages for consumers forced to pay inflated fees. Rival ticketing companies could claim anticompetitive conduct suppressed their business. But lawsuits face high burdens of proof.
While no action is guaranteed, the hearing underscores Ticketmaster’s antitrust risks. Agenciesalready probed its 2021 acquisition of UK-based Seatwave. And with ticketing controversies bound to recur, calls for enforcement may intensify.
Conclusion
The Ticketmaster Senate hearing spotlighted longstanding competition concerns in the live event ticketing industry. Lawmakers unified in bipartisan concern over the company’s market power, fees, and service issues they say exploit fans. While concrete action remains uncertain, the high-profile scrutiny poses real legal, political and PR risks for the dominant ticketing giant. With consumers and politicians inflamed, Ticketmaster likely faces increased oversight and pressure to reform its practices. The hearing served warning that anticlimactic ticketing dramas like the Swift fiasco could finally spur regulators and legislators to act against perceived monopolistic harms.