By Shabrina Defi Khansa, LL.M. 2023
Taylor Swift’s fans, affectionately called Swifties, closed out 2022 with an antitrust complaint filed in Los Angeles County Superior Court against Ticketmaster, the online ticketing giant. In late November, after waiting in endless e-queues for tickets to Taylor Swift’s Eras tour, Swifties were hit with sky-high prices or completely sold-out shows. They are demanding the Federal Trade Commission (FTC) investigate Ticketmaster for ‘predatory’ and ‘misleading’ tactics. As a result of this ticket fiasco, the U.S. Department of Justice (DOJ) opened an antitrust investigation into Live Nation Entertainment, the owner of Ticketmaster, and on January 24th, the Senate Judiciary Committee held its first hearing to investigate the case.
In 2010, Ticketmaster merged with Live Nation to become Live Nation Entertainment. Ticketmaster has been the primary ticketing service provider in the U.S. for over two decades and Live Nation is the country’s largest concert promoter. Prior to the merger, Live Nation had been Ticketmaster’s largest ticketing client for several years. The merger eliminated head-to-head competition between Ticketmaster and Live Nation in the provision of primary ticketing services—potentially in violation of Section 7 of the Clayton Act. 15 U.S.C. § 18. Instead of seeking an injunction to block the merger in 2010, the antitrust division of the DOJ under the Obama administration allowed the proposed merger to proceed under two conditions: that Ticketmaster divest itself of one of its ticketing divisions and that it license its software to a competitor. In addition, the merged company would be subject to what the DOJ called “tough anti-retaliation provisions” to prevent abuse of its power over concert tours, artist management, ticketing, and theaters for 10 years .
However, after ten years, Live Nation did not live up to its end of the bargain. In 2019 the antitrust division of the DOJ filed United States v. Ticketmaster Entertainment Inc. and Live Nation Inc. and claimed that Live Nation had repeatedly violated the settlement terms. As a result, the DOJ extended the terms of the settlement by five and a half years, adjusted some of the agreement’s language to clarify what the company was allowed to do when negotiating ticketing deals with venues, and added a provision that Live Nation pay a fine of $1 million dollars per violation.
Until now, no strong competitors have emerged to challenge Live Nation Entertainment. The company singularly dominates the multibillion-dollar online ticketing market. According to Duke University Professor Barak Richman, “concertgoers can only rely on this company; the DOJ should have taken action years ago before there became so few options in the ticket sales market.” Representative Alexandria Ocasio-Cortez, D-NY agrees, tweeting on December 15, 2022 that, “Ticketmaster is a monopoly, its merger with Live Nation should never have been approved, and they need to be reined in. Break them up.”
Will this time be different?
Although many Swifties have missed their chance to see Taylor this time, there is reason to believe that the next time they go to buy tickets they will have more and better options. Live Nation is not a first- or even second-time offender. Further, in recent years the DOJ and the FTC have taken a more aggressive approach to antitrust laws against technology companies that may signal a new era of antitrust enforcement.
For example, a recent FTC lawsuit filed in December 2020 seeks to undo Meta’s acquisition of two social media platforms, WhatsApp and Instagram. In July 2022, the FTC also blocked Meta from acquiring a small virtual reality startup. In addition, in January 2022 the FTC and the DOJ jointly announced a decision to undertake review of their merger guidelines. The agencies are seeking input as to whether the traditional separation of horizontal and vertical merger analysis accurately reflects the realities of the modern economy. They will assess whether traditional enforcement in antitrust law accurately captures complex and dynamic business relationships, particularly in technology markets.
Given the current spotlight on consolidated power among large technology companies, it is reasonable to expect that the DOJ’s tune will be markedly less tolerant in this round of Live Nation investigations. This is exactly what antitrust advocates and Swifites are hoping for, and whatever the outcome, antitrust advocates can at least celebrate a new generation of supporters. As FTC Chair Lina Khan noted in December, the Eras Tour debacle “ended up converting more Gen Zers into anti-monopolists overnight than anything I could have done.”
*Anti-hero means anti-competition. Senator Richard Blumenthal called out deceptive ticketing practices by Ticketmaster during the recent Taylor Swift tour ticket sale and tweeted ‘Consumers deserve better than this anti-hero behavior.’