ALISON WYNNE—Following a merger in 2010, Ticketmaster became a wholly-owned subsidiary of Live Nation. This merger was conditioned on Live Nation being prohibited from “retaliating against concert venues for using another ticketing company [besides Ticketmaster], threatening concert venues, or undertaking other. . .actions against concert venues for ten years.” Despite this condition, the Department of Justice felt that Live Nation violated the prohibitions and exhibited conduct harmful to consumers. To address this problem, in 2019, the Justice Department modified and extended the consent decree—which placed explicit penalties on the original prohibitions of the Live Nation/Ticketmaster merger—for another five and a half years.
Flash forward to 2022, presale tickets for Taylor Swift’s “The Eras Tour” went on sale. Fans were initially optimistic about their ability to purchase tickets because Ticketmaster supplied ‘Verified Fans’ with presale codes. However, that optimism was quickly dispelled once fans logged into Ticketmaster and found themselves in a lengthy online queue. Many fans waited for hours because of the thousands of people ahead of them. Despite Ticketmaster selling over two million Taylor Swift tickets that day—a record number, it did not take long for disgruntled fans to file a lawsuit against Ticketmaster alleging antitrust violations.
Monopolization is among the antitrust violations alleged by the fans who filed the lawsuit. Under current law, a company may lawfully have a monopoly, charge high prices, or try to achieve a monopoly by using aggressive methods. However, a company commits an antitrust violation when the company’s methods go from being aggressive to unreasonable. A firm that “unreasonably restrains competition by creating or maintaining monopoly power” will violate section 2 of the Sherman Act.
For a successful claim of monopolization under section 2 of the Sherman Act, both monopoly power in the relevant market and an exclusionary act—what Antitrust expert, Michael Kelly, would call a “competitive dirty trick”—are needed. Monopoly power is market power that is sufficient to exclude competitors. The fact that Ticketmaster could sell over two million tickets in one day, despite their increased price, indicates Ticketmaster’s market power. And while Ticketmaster only holds about 30% of the market share for concert ticket sales, consumer advocates estimate it controls 70% of primary ticket sales. This percentage may be sufficient for monopoly power in the primary ticket sales market. But further investigation would help confirm whether Ticketmaster has monopoly power in the relevant market.
Along with monopoly power, Ticketmaster must commit an exclusionary act to be found guilty of monopolization. To distinguish between exclusionary conduct and competitive conduct, it is important to determine the act’s effects on consumer welfare. If an act harms competitors but increases consumer welfare, it is likely to be an act that will promote innovation and competition. But if the act harms competitors and decreases consumer welfare, it is likely an exclusionary act. As Michael Kelly states, evidence of Ticketmaster “crashing its own website chains will not suffice.” Ticketmaster’s website preventing consumers from buying tickets is distinguishable from previous acts that the court has considered exclusionary. With the Taylor Swift tickets, consumers were prevented from purchasing tickets from Ticketmaster itself, which harmed Ticketmaster. Because Ticketmaster’s website crashed, Ticketmaster was deprived of a record amount of ticket sales. In U.S. v. Microsoft Corp., Microsoft’s creation of a ‘Doomsday’ code—which prevented consumers from relying solely on the competitors’ software—was an exclusionary act. Also, in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., Aspen Skiing Co. denied customers access to the slopes despite the customers’ offers to pay cash to ski. The denial in Aspen Skiing Co. indicates exclusionary conduct, as no business would forgo short-term profits if not for the company’s optimism that it could recoup monopoly profits in the future. Microsoft and Aspen Skiing Co. differ from Ticketmaster because, in the case of “The Eras Tour” ticket sales, Ticketmaster’s website crash harmed itself, preventing itself from obtaining higher profits.
But in Lorain Journal Co. v. United States, the court found that Lorain Journal violated antitrust laws by attempting to monopolize when it gave its customers an ultimatum—that the customers must refuse to engage in business with the newly established radio station if the customers wanted to continue advertising in Lorain Journal. Similarly, the Department of Justice has previously claimed that Live Nation violated its consent decree by “threatening to pull live shows from venues that did not contract with Ticketmaster and/or retaliating against venues that did not contract with Ticketmaster by withholding Live Nation concerts.” One violation includes a Ticketmaster executive telling a venue that “if [the venue] moves in that direction (i.e., not renew[ing] with Ticketmaster), [the venue] won’t see any Live Nation shows.” Ticketmaster also allegedly ceased to contact a venue about booking Live Nation concerts after the venue used a competitor as its primary provider, but once the venue switched back to Ticketmaster, Ticketmaster resumed its discussions with the venue. Although Live Nation denies these allegations, if these allegations are true then the conduct alleged is similar to Lorain Journal’s conduct and may be a violation of antitrust laws. However, it is unclear whether a court would accept Lorain Journal Co. as an analogous case because Lorain Journal had a “complete daily newspaper monopoly of local advertising . . . and practically indispensable coverage of 99% of [local] families,” while Ticketmaster only has a majority of the market share for concert ticket sales.
On January 24, 2023, Ticketmaster appeared before the Senate Judiciary Committee for a hearing. This marked the first of several Congressional hearings, but once the hearings conclude Ticketmaster will understand the penalties it faces, if any.
