By: Kiara Benac
The recent issue with Taylor Swift ticket sales has exposed potential antitrust law violations, leaving many with “Bad Blood” towards Live Nation and Ticketmaster’s business practices. Concert enthusiasts are reflecting on past criticism and questioning whether the ticket buying industry can change. The Sherman Act (1890), Federal Trade Commission Act (1914), and the Clayton Act (1914) collectively represent the core of federal antitrust law, which seeks to preserve free and unfettered competition as the rule of trade and ban both unfair methods of competition and unfair or deceptive practices. Antitrust concerns arise when companies engage in vertical or horizontal mergers. Vertical mergers involve combining companies with different corporate operations serving distinct supply chain functions, while horizontal mergers combine companies competing in the same industry. Mergers like these do not automatically correlate with violating antitrust laws. Rather, courts look at potential antitrust violations on a case-by-case basis to determine whether an unlawful merger or business practice exists.
Live Nation vertically merged with Ticketmaster in 2010, touting their vision that venues, promoters, managers, and ticket sellers would benefit from the efficiency created by sharing some infrastructure. Despite such outlook, the Live Nation merger with Ticketmaster garnered skepticism, such as from Congress, antitrust experts, and others in the industry that “felt uneasy” about the merger’s effect on the market. Since the merger in 2010 that vertically joined concert promotion with a ticketing platform, Live Nation and Ticketmaster now represent a “colossus without equal in the multibillion-dollar live music business.” For example, the companies now control more than 300 venues worldwide and ticketing at 70 to 80 percent of major concert venues in the US, resulting in the sale of nearly 500 million tickets per year and the grossing of more than the entire US record industry in the same year. The relationship between the two companies, such that “Live Nation can profit from concerts put on by rival promoters because it still makes money through its control of Ticketmaster,” effectively represents a “monopoly that covers an entire supply chain.”
Although concerns about Live Nation-Ticketmaster’s unparalleled dominance have existed for decades, the week of November 14, 2022, shed new light on the controversial merger when Taylor Swift fans experienced firsthand the effects of corporate monopolies. Fans were eager to buy tickets for Taylor Swift’s upcoming “Eras Tour,” having two presale opportunities including a Verified Fan presale and a Capital One Cardholder presale prior to the general on sale that Ticketmaster ended up cancelling. Despite waiting upwards of eight hours in virtual queues and having tickets in their carts, many fans did not secure presale tickets due to technical issues such as having verified fan codes rejected, copious queues, and glitches at checkout that prevented them from purchasing tickets. Such situations left fans heartbroken and outraged, criticizing Ticketmaster’s system for allowing resellers to price gouge tickets within minutes of them going on sale. Ticketmaster blamed unprecedented traffic and cyber-attacks for the apparent issues, despite assuring Taylor Swift that the company could handle the demand. Fans don’t buy it, and in response have mobilized online to bring suit against Ticketmaster, launching an antitrust initiative called S.W.I.F.T. (“Swifties Working to Increase Fairness from Ticketmaster”).
The news garnered the attention of the Department of Justice, which opened an antitrust investigation two days after the presales concluded, as well as lawmakers from the House Energy and Commerce Committee, who sent a letter to Live Nation’s CEO in December demanding a briefing. A subsequent hearing, titled “Entertainment,” took place on January 24, 2023 to investigate Ticketmaster’s operations, competition, and contracts. Although the results of the hearing have not yet been determined, the hearing itself has already been noteworthy, achieving the rare feat of uniting politicians across the aisle, who displayed a consensus in their criticism of Ticketmaster’s practices. For example, Senator Richard Blumenthal, Democrat of Connecticut, mockingly congratulated Mr. Berchtold, president and CFO of Live Nation Entertainment, Ticketmaster’s parent company, thanking him for an “absolutely stunning achievement. . . [by bringing] together Republicans and Democrats in an absolutely unified cause.”
Mr. Berchtold apologized for the ticketing fiasco, stating that “we need to do better and we will do better,” but ultimately blamed the “terrible consumer experience” on increased bot traffic and the “unprecedented demand for Taylor Swift tickets” that forced them to slow down and pause sales. However, representatives expressed their skepticism to Berchtold’s excuse of online bot assaults, with Senator Marsha Blackburn, Republican of Tennessee, angrily stating that it is “unbelievable” that the company has “not developed an algorithm to sort out what is a bot and what is a consumer,” and Senator John Kennedy, Republican of Louisiana, bluntly stating that “[t]he way your company handled the ticket sales with Ms. Swift. . . was a debacle.” Senator Josh Hawley, Republican of Missouri, inquired into the point that outraged fans, Ticketmaster’s resale market, stating that it “[forces] everyone in the resale market to come into [Ticketmaster’s] ecosystem,” and analogized it to “how monopolies work. . . [leveraging] market power in one market to get market power in another market.” The recent hearing not only signals a collaborative effort among representatives to “make a better experience for the consumer,” but also puts pressure on the DOJ to enact change that could significantly impact how consumers buy tickets. For example, Senator Blumenthal anticipated that “unwinding the merger ought to be on the table” and proposed the BOSS Act requiring more transparent ticket sales and resales. Colorado has already followed suit, introducing bill SB23-060, which includes simple reforms such as transparent pricing, banning speculative ticketing, protecting ADA tickets, and implementing anti-bot rules all in order to promote transparency and “consumer-friendly” practices for event-goers.
The Taylor Swift Eras Tour sparked renewed attention to Ticketmaster’s issues, which have existed since the 90’s. For example, the company’s acquisition of seven competitors between 1985 and 1991 caused consumers to feel that Ticketmaster was “already too mammoth.” A 1992 Boston Globe investigative report further exposed Ticketmaster for up charging its service fees and in 1994, Pearl Jam filed a memo with the Justice Department regarding Ticketmaster’s abuse of its marketplace dominance. The Pearl Jam case could have “fundamentally change[d] the way tickets are sold to the public,” but the DOJ investigation halted in 1995, reasoning at the time that the lawyers did have enough basis to make their case, but likely stopping because of “unalloyed political corruption.” Although the DOJ allowed the Live Nation-Ticketmaster merger to proceed, despite opposition noting that Ticketmaster market share exceeded 80%, it placed conditions upon the merger through a consent decree that expires in 2025.
The hearing, along with Colorado’s proposed bill, should garner attention from those interested in antitrust laws or fans of attending ticketed events, regardless of their opinion of Taylor Swift. The representatives’ questioning of Ticketmaster signals the DOJ to inquire further about dismantling the Live Nation – Ticketmaster merger, which hasn’t happened to a major company since the 1980’s when the federal government broke up AT&T. Although Ticketmaster has long faced criticism since the 90’s, with the government not enacting any change, the aftermath of Taylor Swift Eras Tour ticket sales may serve as the catalyst for change to occur, with the sentiments shared at the hearing and subsequent proposed bills signaling such support.
The ticket selling infrastructure has undergone significant changes since the merger between Ticketmaster and Live Nation first occurred in 2010, transforming from one where it was commonplace to secure tickets directly from the venue, potentially after waiting in person in a physical line, to it now being all too common for tickets to sell out within moments of becoming available online. The issues with ticket sales online go beyond the basics of supply and demand, as Ticketmaster and Live Nation notoriously exert their dominance over interested buyers and venues by leveraging their control over multiple markets. LiveNation and Ticketmaster have a power imbalance over the rest of the industry that dissuades venues from using competitors, such as the Barclays Center switching back from SeatGeek to Ticketmaster because it subsequently received fewer LiveNation tours, and places consumers at the will of an exploitative resale market regardless of their forethought to sign up for presales. The fact that the recent hearing garnered unified bipartisan support not only stands out as an anomaly, but also reflects the undoubted reality that Ticketmaster and Live Nation’s merger operates as a modern-day monopoly that dissuades competition and negatively impacts consumers, venues, and artists.
The DOJ should have taken Pearl Jam’s concerns more seriously in the 90’s, but now has the opportunity to correct past wrongs, such as by not renewing the consent decree given to Ticketmaster and Live Nation. Taylor Swift fans exposed how Ticketmaster and Live Nation’s systems are wrought with abuse, but the issues are not unique to Taylor Swift fans, as those who have tried to buy tickets online for a concert, sports game, or other event have likely also experienced the frustration that comes with seeing bots claim up tickets at their original price. Although companies such as SeatGeek attempt to offer competition, the reality appears as an unfair David and Goliath situation that epitomizes what antitrust laws sought to prevent. Ticketmaster’s attempt to blame bots does not offer protection from accountability. Instead, it raises questions on their management practices, including why they have not done more to prevent it, and why they have not upgraded when functional systems exist, such as those used by Snapchat which “has just as many users every second as [ticket websites] have when they’re trying to sell tickets for an hour.”
Despite receiving criticism since the 90’s, Ticketmaster and Live Nation haven’t changed for the better, because their monopolistic control of multiple markets makes it possible for them to not have to. They could take action to stop bots, make ticket resales more honest, ban dynamic pricing, and eliminate ineffective queues, but they haven’t, and it does not appear that they have attempted to. Time will tell whether long-term change in the ticketing sales market occurs, either voluntarily or from federal action, but in the meantime it will be insightful to follow the recently announced Beyonce tour to see how Ticketmaster handles the added pressure and whether fans can reasonably secure tickets without feeling like they have to succumb to monopolistic desires. Although Ticketmaster’s new approach of dividing the Beyonce ticket sales into three groups of cities and using three staggered presale categories made it easier for some to secure tickets, others described it as the “worst experience ever” and demanded “more transparency with how the prices are determined and why they change.” Thus, the government should not allow Ticketmaster to slap a Band-Aid on a considerable problem, but rather maintain momentum to address the company’s monopolistic characteristics that impact ticket seekers of any genre.
Student Bio: Kiara Benac is a second-year law student at Suffolk University Law School. She is a staffer on the Journal of High Technology Law. Kiara received a Bachelor of Arts from Wellesley College in 2018 with a Political Science Major, Economics Minor, and Portuguese concentration.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
