What the Ticketmaster Settlement Failed to Achieve
And why states need more antitrust resources.
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Under the Biden Administration, the Department of Justice and 40 states sued LiveNation-Ticketmaster, alleging that it had illegally monopolized the live events industry, causing harm to fans, entertainers, and venue owners. Because antitrust cases typically move at a glacial pace, the trial only began last week — and then was abruptly settled by the Trump Administration.
It seems this was a total sandbagging: Neither the judge, lead DoJ attorney, nor the lawyers for the states knew that a concrete settlement was in the offing, and no artists have even taken the witness stand yet. The settlement appears to be the latest instance of the Trump team caving to lobbyists and political staff, overruling career DoJ lawyers on behalf of corporate interests. You can read more about that here.
Crucially, more than two dozen state attorneys general — from both blue and red states — have said they do not intend to join the settlement and want to continue the trial. I’m going to explain both why that’s the right move on the merits, as well as a daunting challenge given the resource constraints under which state antitrust enforcers operate.
According to the terms of the settlement, Live Nation-Ticketmaster will pay about $280 million in “restitution,” allow other sellers access to Ticketmaster’s platform at a venue’s discretion, limit exclusive deals with venues to four years or less, and divest a rather random set of 13 amphitheaters, while ensuring artists have access to its remaining amphitheaters regardless of whether or not they use Live Nation promotion.
That penalty is the equivalent of four days of the corporation’s revenue last year — so they will have made it back by the end of the week — and the future penalty for violating the terms of the settlement is a whopping $5 million per violation, basically a rounding error.
What the settlement does not do is change the fundamental problem at the heart of the lawsuit: That Live Nation’s ownership of venues, management of artists, and promotion arm provides Ticketmaster the leverage to do all the unsavory things it does, including charge high fees, use dynamic pricing, and generally be a giant mess, while venue owners and entertainers have no recourse. As another lawsuit against the corporation put it, “venue operators must take into account the very real possibility that Live Nation Entertainment will not route tours through their venues if they do not select Ticketmaster as their primary ticketing service provider.”
Indeed, there had already been evidence provided at the trial that this dynamic is real, not theoretical, with Live Nation-Ticketmaster allegedly retaliating against the operators of the Barclays Center in Brooklyn for switching to a different ticketing platform by refusing to allow artists to book shows there. This power has enabled Ticketmaster to hold more than 70 percent of the primary ticketing market in the United States.
The settlement also does nothing to prevent what’s known as Ticketmaster’s “double dip” problem — wherein it receives payment both when tickets are sold and resold, giving it no incentive to crack down on scalpers or ticket-purchasing bots — and also does very little for artists who play smaller venues below the amphitheater size. (Believe me, I have a stake in this!)
When the case was first filed, the DoJ said that the minimum acceptable outcome was a breakup of Ticketmaster and Live Nation, undoing the 2010 merger that created this behemoth. The settlement obviously comes nowhere close to achieving that aim, twiddling at the edges while ensuring the corporation’s monopoly remains intact. Indeed, there’s a history of these sort of settlements utterly failing to curb monopoly power.
“The settlement recently announced does not adequately remedy the harms to the marketplace for live music and to concertgoers caused by Live Nation,” said New Jersey Attorney General Jennifer Davenport. “We are willing and able to stand with other partner states to continue litigating this case without the federal government so that we can hold Live Nation accountable in court and secure appropriate relief in this case.”
Thus far saying they will continue the case are the attorneys general of Arizona, California, Colorado, Connecticut, Illinois, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin, Wyoming, and the District of Columbia.
Again, note that these states run the political gamut: Hatred of Ticketmaster truly unites the country.
They have a large task before them, though, and the judge in the case seems cranky that the states claim they aren’t ready to immediately go it alone, as there have been whispers of a settlement coming for quite a while.
But the manpower issues here are very real: The DoJ reportedly had 40 attorneys working on the case, while there are fewer than 300 antitrust attorneys at the state level in the entire country, and those are concentrated in a handful of large states, including New York, California, Texas, and Illinois.
According to a 2020 survey (which may be out of date to be clear), there are a bunch of states that have no antitrust attorneys on staff at all, and another handful with just one or two, despite the fact that every state can enforce federal antitrust law on behalf of its residents, and that nearly every state has its own antitrust statute as well. Otherwise, states have to rely on hiring outside counsel, something state legislatures don’t usually love to pay for at the best of times, which these are decidedly not, thanks to the faltering economy and federal tax cuts that trickle down to the state level. .
The judge overseeing the Ticketmaster case is also pushing the states to settle, saying, “You should be focused on ‘Can we make a deal?’ … I want to see if you can get a deal done.” So the decks are already pretty stacked against an adequate resolution, and it seems as if the states will have to blitz into a trial next week if the judge allows them to continue.
That’s grim, and even grimmer is that, between this settlement and others, it’s abundantly clear that DoJ’s current antitrust and merger policy is a pay-to-play process where political access trumps the law. So the states are now the first line of defense against increased corporate consolidation, and are going to be for the foreseeable future, whatever their resource constraints.
SIMPLY STATED: Here are links to a few stories that caught my eye this week.
An ad campaign backed by undisclosed sources is pushing New Mexico residents to support a data center development.
Republican leaders in the Ohio statehouse intend to override the governor’s veto of a bill that repealed the state’s data center tax break.
Corpus Christi, Texas, is headed for a “water catastrophe” due to decades of failed economic development policies.
The Republican-held South Carolina Senate has approved a Democratic bill to limit investor purchases of single-family homes.
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— Pat Garofalo