The Justice Department and dozens of state attorneys general filed a major antitrust lawsuit Thursday seeking the breakup of Ticketmaster owner Live Nation Entertainment over what they claim is the company’s illegal domination in the concert ticket sales sector.
The suit, filed by the DOJ and 30 state and district attorneys general in federal court for the Southern District of New York, accuses the company of creating a monopoly in the live entertainment market that has harmed music fans , to artists and promoters across the United States. due to higher prices and frustrating consumer experiences.
“The result is that fans pay more in entry fees, artists have fewer opportunities to play concerts, smaller promoters are squeezed out and venues have fewer real choices when it comes to ticketing services,” said Attorney General Merrick Garland in a statement announcing the trial. “It’s time to dismantle Live Nation.”
“For too long, Live Nation and Ticketmaster have unfairly and illegally ruled the live events world, abusing their dominance to overcharge fans, intimidate venues, and limit artists,” New York Attorney General Letitia James said in a statement. in a press release. “When companies like Live Nation control every aspect of an event, it leads to tensions: spectators and sports fans suffer and are forced to pay more. Everyone agrees, Live Nation and Ticketmaster are the problem and it’s time for a new era. Today we are taking this important step to protect consumers and force big companies to stop abusing their influence and educate themselves.”
The sweeping lawsuit is the product of a more than two-year investigation into the company that has been under increasing public scrutiny since late 2022, following a pre-sales fiasco for Taylor’s Eras tour Swift.
Ticketmaster, which controls more than 70% of the ticketing and live events market, collapsed on the first day of sales, leaving millions of fans out of luck or looking for more expensive tickets on the secondary market.
The Justice Department’s lawsuit accuses LiveNation of seeking to exclude competitors to protect what the company calls its “flywheel,” described in court documents as “a self-reinforcing business model that captures fees and costs.” concert fan and sponsorship revenue, uses that revenue to lock artists into exclusive promotional deals, then use its powerful cache of live content to sign venues into long-term exclusive ticketing deals, thus starting the cycle again . “
Live Nation did not immediately respond to ABC News’ request for comment on the lawsuit, although its president, Joe Berchtold, has otherwise defended the company’s business practices – including during a controversial appearance before the Congress early last year.
Live Nation released a statement Thursday following the lawsuit, saying in part that it was “absurd to claim that Live Nation and Ticketmaster exercise monopoly power.”
The lawsuit “blames concert promoters and ticketing companies – neither of which control ticket prices – for high ticket prices,” said Dan Wall, Live Nation Entertainment’s executive vice president of corporate and regulatory affairs. Inc. “It ignores everything that is actually responsible for rising ticket prices, from increased production costs to artist popularity to 24/7 online ticket scalping out of 7, which reveals the public’s willingness to pay much more than the main cost of tickets. He blames Live Nation and Ticketmaster for the high service fees, but ignores it. Ticketmaster only keeps a modest portion of these fees. In fact, primary ticketing is one of the lowest cost digital distributions in the economy.
“The defining characteristic of a monopolist is monopolistic profits derived from monopoly prices. Live Nation does not fit the profile in any way. Service fees on Ticketmaster are no higher than elsewhere, and often lower. And even “When accounting for sponsorship, an advertising activity that helps keep ticket prices down, the company’s overall net profit margin is on the low end of profitable S&P 500 companies,” Wall said.
“It is also clear that we are another victim of this administration’s decision to turn over antitrust enforcement to a populist impulse that simply rejects the way antitrust law works,” Wall said, in part. “Some call it ‘anti-monopoly,’ but in reality it’s just anti-business.”
Among the practices singled out by the DOJ are allegations that Live Nation exploited its relationship with the company Oak View Group, which the lawsuit says describes itself as a “hammer” for Live Nation and avoided bidding against the company. company for exclusive deals with major artists and venues. .
According to the Justice Department, the company also threatened potential competitors seeking to enter the concert promotion market and created a climate in which venue owners were fearful of entering into contracts with Live Nation-Ticketmaster’s rivals.
Live Nation-Ticketmaster is also accused of using lengthy exclusivity contracts with venues that, according to the lawsuit, prevent them from switching to better or cheaper ticketing systems and, in some cases, even allegedly prevented venues to use multiple ticket offices for events.
Live Nation was already under a settlement ruling with the Justice Department after approving its merger with Ticketmaster during the Obama administration in 2010 – under conditions that included prohibiting the company from threatening theaters in concert who chose to use competing ticketing companies. This decree was extended in 2019 after the ministry found that the company had violated its conditions.
The lawsuit is the latest in a series of aggressive antitrust efforts by the Biden administration, which has brought similar enforcement efforts to challenge companies like Apple, Google and Amazon over what it claims are blatant anti-competitive practices that have served to harm American consumers.
The White House supports the DOJ’s lawsuit against Live Nation and Ticketmaster, saying Thursday afternoon that “while we do not comment on specific enforcement matters, President Biden strongly supports fair and robust enforcement of the antitrust laws.” .
“As the president has said, the American people are tired of being played for fools,” White House press secretary Karine Jean-Pierre said in a statement.
“The President launched the Unfair and Illegal Pricing Strike Force because no American should pay higher prices or lose choices because companies break the law and engage in anticompetitive practices. His administration has taken “measures to combat corporate greed by banning hidden unwanted fees – including event tickets – that unfairly raise prices for hard-working families trying to make ends meet,” Jean-Pierre said .
ABC News’ Zunaira Zaki and Justin Ryan Gomez contributed to this report.
This story has been updated.