The Justice Department on Thursday sued Live Nation Entertainment, the concert giant that owns Ticketmaster, asking a court to break up the company over claims it illegally maintained a monopoly in the live entertainment industry.
In the lawsuit, which is joined by 29 states and the District of Columbia, the government accuses Live Nation of using its vast empire to dominate the industry by tying venues into exclusive ticketing contracts, pressuring artists to use its services and threatening its rivals with financial backing. remuneration.
These tactics, the government claims, have resulted in increased ticket prices for consumers and stifled innovation and competition across the industry. The lawsuit asks the U.S. District Court for the Southern District of New York to order “the divestiture, at a minimum, of Ticketmaster” and to restrain Live Nation from engaging in anticompetitive practices.
“It's time for fans and artists to stop paying the price of Live Nation's monopoly,” Merrick B. Garland, the attorney general, said Thursday. “It's time to disband Live Nation-Ticketmaster. The American people are ready.”
The lawsuit is part of a broader push by American regulators to rein in corporate power in the Internet age, testing centuries-old antitrust laws against big companies' power over consumers. The Justice Department has sued Apple and filed two lawsuits against Google, while the Federal Trade Commission has filed antitrust lawsuits against Amazon and Meta.
The Justice Department's latest lawsuit is a direct challenge to the business of Live Nation, a behemoth of the entertainment industry and a force in the lives of musicians and fans. The case, filed 14 years after the government approved Live Nation's merger with Ticketmaster, has the potential to transform the multibillion-dollar concert industry.
Live Nation's size and reach far exceeds that of any competitor, encompassing concert promotion, ticketing, artist management and management of hundreds of venues and festivals around the world. “Live Nation has its tentacles into virtually every aspect of the live entertainment industry,” the government says in its complaint, which covers more than 120 pages.
According to the Department of Justice, Live Nation controls approximately 60% of concert promotions at major venues in the United States and approximately 80% of primary ticketing at major concert venues.
Lawmakers, fans and competitors have accused the company of engaging in practices that harm rivals and drive up ticket prices and fees. At a congressional hearing early last year, prompted by Taylor Swift's tour pre-sale on Ticketmaster that left millions unable to purchase tickets, senators from both parties called Live Nation a monopoly.
In its complaint, the Justice Department refers to the numerous additional fees as “essentially a 'Ticketmaster tax' that ultimately increases the price fans pay.”
In response to the lawsuit, Live Nation denied that it was a monopoly and said that splitting it would not result in a reduction in ticket prices or commissions. According to the company, artists and sports teams are primarily responsible for setting ticket prices, while other commercial partners, such as venues, take the lion's share of the surcharges.
In a statement, Dan Wall, Live Nation's executive vice president of corporate and regulatory affairs, said the Justice Department's lawsuit followed “intense political pressure.”
The government's case, Wall added, “ignores everything that is actually responsible for rising ticket prices, from rising production costs to artist popularity to 24/7 online scalping, which reveals the public's willingness to pay much more than the cost of primary tickets. “
The company also says its market share in the ticketing industry has declined in recent years as it competes with rivals for business.
Senator Amy Klobuchar, Democrat of Minnesota, who led the Senate Judiciary Committee hearing on Live Nation last year, welcomed the Justice Department's lawsuit, including its request to break up the company.
“Live Nation continues to get bigger and bigger, more and more dominant,” Ms. Klobuchar said in an interview after the lawsuit was filed. “The fact that they're coming out and asking for a breakup, I think, is the right thing to do as a remedy.”
The Justice Department allowed Live Nation, the world's largest concert promoter, to buy Ticketmaster in 2010 under certain conditions set out in a legal settlement. If venues didn't use Ticketmaster, for example, Live Nation couldn't threaten to hold concert tours.
In 2019, however, the Department of Justice found that Live Nation had violated those terms and modified and extended its agreement with the company.
Among the antitrust lawsuits recently filed, the one against Live Nation stands out for having specifically requested the breakup. In other cases the government has chosen not to ask for a specific solution until it sees how a court will rule on its requests. But Live Nation's ownership of Ticketmaster is central to the Justice Department's new case.
William Kovacic, former chairman of the Federal Trade Commission, said Wednesday that a lawsuit against the company would be a rebuke to previous antitrust officials who allowed the company to grow to its current size.
“It's another way of saying that the previous policy failed and failed badly,” he said.
The Justice Department alleges in its lawsuit Thursday that Live Nation exploited partner relationships to keep competitors out of business. Requires a jury trial.
A key part of the Justice Department's case hinges on Live Nation's interconnected activities. Because he organizes concerts, books them, seeks sponsors, and then manages the artists who perform them, he can use each piece to benefit others. This makes it harder for rivals to compete and hurts the ability of new competitors to emerge, the lawsuit claims.
The government's complaint alleged that Live Nation threatened venues with losing access to popular tours if they didn't use Ticketmaster. Such a threat could be explicit or simply an implication communicated through intermediaries, the government said, adding that it could also prevent artists who do not work with the company from using its venues.
Additionally, Live Nation has acquired a number of smaller companies, which Live Nation has described in internal documents as eliminating its biggest threats, according to the government.
One such deal was for AC Entertainment, a regional concert promoter that played a role in Bonnaroo, a popular music and arts festival in Tennessee. Live Nation pursued a deal to buy it in 2016 even though the company had doubts about the economics of the acquisition, according to the complaint.
A senior Live Nation executive said the deal “looks more like a defensive move” against AEG, Live Nation's biggest competitor as a nationwide concert promoter, according to the complaint.
The Justice Department also accused Live Nation of anticompetitive behavior with Oak View Group, a venue company co-founded by Live Nation's former executive chairman. That company has avoided bidding against Live Nation when it comes to working with artists, and has influenced concert venues to sign deals with Ticketmaster, the government alleges.
In 2016, Live Nation's CEO complained in an email that Oak View Group had offered to promote an artist who had previously worked with Live Nation. According to the government, the Oak View Group backed down.
“Our guys have gotten a little ahead of themselves,” its CEO responded in an email, according to the lawsuit. “Everyone knows we don't promote and only tour with Live Nation.”
A representative for Oak View Group declined to comment on the lawsuit.
The lawsuit also highlights the differences between the concert business in the United States, where venues tend to have exclusive agreements with ticketing companies, and in other parts of the world, where venues have “open” agreements that allow for competition between those sells tickets.
“Today, fans pay more in America for tickets to live music concerts than in other parts of the world,” the complaint reads.
The Justice Department's latest investigation into Live Nation began in 2022. Live Nation has simultaneously ramped up its lobbying efforts, spending $2.4 million on federal lobbying in 2023, up from $1.25 million in 2021, according to documents available through the independent website OpenSecrets.
In April, the company co-hosted a lavish party in Washington ahead of the annual White House Correspondents' Association dinner, which featured a performance by country singer Jelly Roll and cocktail napkins displaying positive facts about Live's impact Nation on the economy, like the billions he says he pays to artists.
Under pressure from the White House, Live Nation said in June that it would begin showing prices for shows at venues it owns that include all expenses, including incidentals. The Federal Trade Commission has proposed a rule that would ban hidden commissions.
The Justice Department's lawsuit has received praise from some fans.
Victoria Addison, a lifelong Swift fan, said she saw Live Nation's hold on the industry as the reason she couldn't get tickets to the star's Eras Tour. “I love Taylor so much, but I can't justify spending thousands more on tickets,” Ms. Addison said.
“It's about time,” said Justin Ward, who runs a blog about live music. “I have no idea why the original merger was allowed to happen.”
Julia Jacobs contributed reporting from New York.