By Erika Koutroumpa,
Summer is finally here, and that means one thing: concert season. In recent years, complaints have surged about the difficulty of obtaining tickets for popular artists and the steep pricing of concert tickets. Late last month, the US Department of Justice began acting against Live Nation, the owner of the online ticket retail platform Ticketmaster, alleging monopolistic practices, which have led to the excessive uprising of prices in the past years and billions of fans complaining, while questioning the transparency of its policies.
Live Nation directly manages over 400 musical artists and controls around 60% of major venue concert promotions. Ticketmaster, responsible for about 80% of primary ticketing for concerts, merged with Live Nation in 2010, after the Justice Department controversially approved their union under certain conditions to prevent a monopoly.
Ticketmaster has become the dominant option for purchasing concert tickets, driving smaller promoters out of business. This dominance has led to inflated prices, leaving consumers with no alternative but to pay exorbitant fees. The situation has also reduced performance opportunities for artists.
A major point of criticism against Ticketmaster is its “flywheel” model. This system uses money from ticket sales and sponsorships to secure exclusive promotion deals with high-demand artists. It then establishes exclusive ticketing arrangements with popular venues, perpetuating the cycle. Allegations also include threatening and targeting potential rivals, as well as venues working with competitors and acquiring competing companies.
This issue isn’t new. Both politicians and concertgoers have called for a re-examination of the merger for years, with frustrations peaking in 2022, during the Taylor Swift concert ticket scandal. The Biden administration’s recent emphasis on antitrust laws has brought this issue to court, highlighting a broad spectrum of companies. Live Nation, however, argues that the lawsuit won’t address the real problem: the imbalance between the high demand and limited supply of live show access.
The Department of Justice has called for the divestiture of Ticketmaster and relief of damages. But what does this mean? Divestiture involves the partial or full disposal of an asset by a company or government entity through sale, exchange, closure, or bankruptcy. Essentially, they are requesting Live Nation to divest from Ticketmaster and completely restructure its business model to foster competition and innovation in the ticketing industry.
References
- Live Nation ‘suffocates its competition,’ US says in monopoly lawsuit. Reuters. Available here
- Divesiture- Cornell Law School. Legal Information Institute. Available here
- Justice Department Sues Live Nation- Ticketmaster for Monopolizing Markets Across the Live Concert Industry. US Department of Justice, Office of Public Affairs. Available here
- Will The Antitrust Lawsuit Against Live Nation Break Its Hold On Ticketmaster? Forbes. Available here
