The Division of Justice is reportedly making ready an antitrust lawsuit towards Live Nation Entertainment, the dad or mum firm of Ticketmaster, as quickly as next month, marking a swing towards the world’s largest ticket vendor and one other chapter within the Biden administration’s formidable anti-monopoly efforts.
The particular claims regulators would allege are unclear, however in accordance with the Wall Road Journal, which first reported on the go well with, it would concern how the concert-promoting firm has leveraged its dominance to undermine its rivals.
Ticketmaster and the Justice Division didn’t reply to Fortune’s request for remark.
The DOJ launched an investigation into Ticketmaster in the summertime of 2022 to probe alleged anticompetitive practices. A Senate subcommittee additionally launched an investigation final yr.
Whereas Ticketmaster has lengthy been a goal of hate for live performance goers, musicians, and a few venues, the ire reached a brand new stage within the fall of 2022, when the location crashed during a fan presale for Taylor Swift’s ‘Eras Tour’. Followers suffered by means of a sequence of unlucky occasions–hours- and days-long wait occasions for tickets, waves of bots buying and upselling tickets, and unpredictable costs–solely for a lot of of them to finish up with out tickets. The debacle noticed members of Swift’s fan base suing Ticketmaster, too. The federal government’s newest transfer exhibits that these considerations are nonetheless high of thoughts for regulators hoping to crack down on the ticket vendor’s practices.
It’s a pointy turnaround from a decade in the past, when the DOJ basically greenlit Stay Nation’s merger with Ticketmaster. For the reason that 2010 deal, which merged the world’s largest stay live performance producer with the world’s main stay leisure ticketing firm, the group has confronted international accusations of extreme ticket charges, poor customer support and bullying smaller competitors. On the time of the merger, the federal authorities cleared the deal however issued a legal order, known as a consent decree, that barred the corporate from pressuring live performance venues to make use of its ticketing software program—one thing it has since been repeatedly accused of doing. The ten-year consent decree was extended in 2020, giving the Justice Division extra energy to manage the corporate’s market dominance.
And indisputably, that dominance is huge. Ticketmaster processes round 500 million tickets all over the world every year and reportedly controls greater than 80% of the market share for main live shows, in accordance with a report by advertising and marketing software program developer HubSpot. The corporate has been rising, too–its income reached $22.7 billion in 2023, in accordance with its annual report, up 36% from the yr earlier than. Ticketmaster’s income additionally grew 73% between the primary and second quarter of 2023 and the corporate offered a record-breaking 90 million tickets through the first 5 months of the yr.
Mockingly, although, the corporate’s indeniable income are a part of why it’s now the topic of a number of antitrust investigations meant to sort out doubtlessly anticompetitive practices fueling the corporate’s development.
A type of is the excessive value of tickets, which significantly outraged rapper Drake’s fan base over one in every of his March 2023 exhibits, the place prospects didn’t count on tickets to promote for a whole lot of {dollars}. The yr earlier than, tickets to see rocker Bruce Springsteen reached as high as $5,000 on the platform, because of its pricing algorithm.
Ticketmaster has maintained that ticket prices are set by artists and their groups, and stated in a blog post that “the venue normally gets around two-thirds of the service charge and in many cases a facility fee as well.” Nonetheless, the corporate has come beneath fireplace for these high service fees, which frequently tack on further a whole lot of {dollars} to ticket orders.
Past that, Ticketmaster’s heavyweight standing has a stranglehold on the stay occasions trade: practically 78% of the highest-grossing arenas and 64% of the highest-grossing amphitheaters within the nation function utilizing Ticketmaster’s providers, in accordance with an American Financial Liberties Mission report from June 2023. With fewer rivals to purchase from, that implies that prospects typically can’t keep away from paying the service charges Ticketmaster tacks on.
In a 2022 assertion, Stay Nations wrote that the marketplace for secondary ticketing is “extremely competitive, with Ticketmaster competing with StubHub, SeatGeek, Vivid and many others,” and that “no serious argument can be made that Ticketmaster has the kind of market position in secondary ticketing that supports antitrust claims.”
Some analysts, like Brandon Ross of LightShed Ventures, stated in a post on X that the lawsuit is more likely to finish in a settlement reasonably than a break-up of the corporate, for the reason that authorities will seemingly goal the corporate’s enterprise practices reasonably than its mannequin.
The federal lawsuit is one in every of a number of led by the Justice Division beneath Biden’s administration, which sued Apple in March for allegedly abusing its dominant place in smartphone and app markets and has sued Google a number of occasions since 2020.
