Justice Department files lawsuit against Live Nation, Ticketmaster’s parent company

The U.S. Department of Justice has filed a lawsuit against Live Nation, the parent company of Ticketmaster, for alleged antitrust violations.

The lawsuit, which has been joined by 30 states and was filed on Thursday, came after a DOJ investigation into whether Live Nation has a monopoly in the ticketing industry. This investigation started in 2022 and was boosted by fan complaints after a messed up ticket release for Taylor Swift’s Eras Tour.

“We claim that Live Nation uses illegal, anticompetitive conduct to maintain its monopoly over the live events industry in the U.S. This is at the expense of fans, artists, smaller promoters, and venue operators,” said Attorney General Merrick Garland. “As a result, fans pay more in fees, artists have fewer chances to perform concerts, smaller promoters are muscled out, and venues have fewer genuine choices for ticketing services. It’s time to break up Live Nation-Ticketmaster.”

Shares of Live Nation dropped by 6% on Thursday.

In response, Live Nation referred to the DOJ’s allegations of a monopoly as “ridiculous.”

“The DOJ’s suit tries to depict Live Nation and Ticketmaster as the source of fan frustration with the live entertainment industry. It blames concert promoters and ticketing companies, neither of which control ticket prices, for high ticket prices. It overlooks the actual causes of higher ticket prices, from increasing production costs to artist popularity, to the round-the-clock online ticket scalping that shows the public’s readiness to pay far more than the original ticket cost,” said Dan Wall, Live Nation’s executive vice president for corporate and regulatory affairs.

Live Nation and Ticketmaster merged in 2010, forming a dominant force in the live event industry. The company manages over 400 artists directly, controls roughly 60% of concert promotions at major concert venues, runs and manages ticket sales globally for live entertainment, and owns and operates more than 265 entertainment venues in North America. This includes over 60 of the top 100 amphitheaters, as per the DOJ lawsuit.

The complaint stated that Live Nation, through Ticketmaster, controls around 80% or more of major concert venues’ primary ticketing for concerts.

“Considered individually and together, the conduct of Live Nation and Ticketmaster allows them to leverage their conflicts of interest — as a promoter, ticket seller, venue owner, and artist manager — across the live music industry and solidify their dominant position,” the complaint reads.

The DOJ lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses Live Nation of violating the Sherman Act and maintaining a self-reinforcing business model. It does this by capturing fees and revenue from concert fans and sponsorships, which it then uses to lock artists into exclusive promotion deals. These deals give the artists access to key entertainment venues across the country. Live Nation then uses this dominance to lock new concert venues into long-term exclusionary contracts, restarting the cycle, according to the lawsuit.

Live Nation is also accused of threatening financial retaliation against potential competitors and venues that collaborate with rivals; strategically buying smaller and regional competitive threats to increase their competitive moat; and exploiting a relationship with venue partner Oak View Group, flipping the latter’s contracts over to Ticketmaster and discouraging competition in concert promotions.

The lawsuit alleges that Live Nation has discouraged bidding wars for artists and has unlawfully pressured artists to sign promotional services contracts if they want to use the company’s venues. Sometimes, it even sacrifices profits it could earn as a venue owner by preferring to let its venues remain unused rather than have artists with other promotional contracts.

“In its own words, Live Nation uses its exclusionary conduct as a ‘hedge against significant improvements by the competition or even a new competitor.’ But the cost of that hedge is one that we all pay, for example, a broken ticketing website with substandard customer service that still captures your valuable data,” said Assistant Attorney General Jonathan Kanter during a press conference.

“It is through these exclusive ticketing arrangements that Americans face the dreaded Ticketmaster tax, the seemingly endless set of fees ironically named service fee or convenience fee when they are anything but,” Kanter said.

Last year, Live Nation made headlines when a rush of demand from 14 million users, including bots, for Taylor Swift concert tickets resulted in site disruptions and slow queues. A Senate subcommittee subpoenaed Live Nation and Ticketmaster in November 2023, following a prolonged investigation triggered by the excessive inflated ticket prices in Swift’s Eras Tour.

High prices for the U.S. shows led many fans to look for tickets to Swift’s tour in other countries, which were often cheaper even after including international air travel.

“In other countries where venues are not bound by Ticketmaster’s exclusive ticketing contracts, venues often use multiple ticketing companies for the same event and fans see lower fees and more innovative ticketing products as a result,” Garland said in a news conference.

On Thursday, Live Nation stated that it doesn’t benefit from monopoly pricing, claiming that Ticketmaster service charges “are no higher than elsewhere, and often lower.” The company pointed out that its overall net profit margin is at the lower end of S&P 500 companies.

Live Nation further argued that the lawsuit won’t reduce ticket prices or service fees. It stated that artist teams set prices for their tickets and the venues set and keep the majority of ticket fees.

“Some call this ‘anti-monopoly’, but in reality, it is just anti-business,” said Live Nation’s Wall. “There is no legal basis for objecting to vertical integration on these grounds.”

Earlier this month, Live Nation reported its “biggest Q1 ever,” citing first-quarter revenue that was up 21% from the same period the previous year.

The company has also been in the public eye over the past year due to transparency issues related to hidden fees in ticket pricing.