U.S. suing Ticketmaster owner Live Nation

Canadians are hopeful that a U.S. lawsuit against concert promoter Live Nation will provide some relief to cash-strapped fans and musicians.

The U.S. Justice Department (DOJ) and a group of 30 states and the District of Columbia on Thursday sued to break up Live Nation, arguing the big concert promoter and its Ticketmaster unit illegally inflated concert ticket prices and hurt artists.

"It is time to break up Live Nation," said U.S. Attorney General Merrick Garland.

Shae Harding, a Taylor Swift fan and mom of two in Langley, B.C., says she couldn't get through the Ticketmaster website to get tickets to the Vancouver concert for herself and her two daughters when they went on sale in November, calling the situation "kind of a nightmare."

Thousands of Swifties were left in a similar position, and tickets were quickly posted for resale at exorbitant prices, some exceeding $26,000.

Harding eventually got tickets through a friend at face value, which was $175 apiece for nosebleeds.

"Something has to be done to stop this, because it's just going to kill concerts. I mean, I've seen tickets go for thousands, tens of thousands of dollars for one ticket and that's insane to me. That's just not right," she told CBC Thursday.

Harding said she is thankful for her friend getting the tickets, but will forever have a sour taste in her mouth when it comes to Ticketmaster.

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Concert fans and politicians for years have been calling for a re-examination of Live Nation's acquisition of Ticketmaster in 2010, especially after the ticket seller botched sales in 2022 to Swift's first tour in years, sending fans into hours-long online queues, charging prices that customers said were too high and drawing charges of poor service.

The debacle prompted congressional hearings and bills in state legislatures aimed at better protecting consumers.

Thursday's legal action underscores the aggressive approach U.S. President Joe Biden's antitrust enforcers have adopted as they seek to create more competition in a wide range of industries, from Big Tech to health care to groceries.

"Live Nation relies on unlawful, anti-competitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters and venue operators," Garland said. He went on to say that as a result fans pay more in fees, artists have fewer opportunities to perform and smaller promoters get squeezed out.

Shares of Live Nation were down 7.8 per cent at close Thursday.

'Vast scope' of influence and control

The suit says Live Nation directly manages more than 400 musical artists and controls around 60 per cent of concert promotions at major venues. It owns or controls more than 265 concert venues in North America, and through Ticketmaster controls roughly 80 per cent or more of big venues' primary ticketing for concerts.

In the lawsuit, filed in the Southern District of New York, the DOJ argued the "vast scope" of Live Nation and Ticketmaster allowed them to "insert themselves at the centre and the edges of virtually every aspect of the live music ecosystem."

The Justice Department accuses Live Nation of a slew of practices that allow it to maintain a stronghold over the live music scene, including using long-term contracts to keep venues from choosing rival ticketers, blocking venues from using multiple ticket sellers and threatening venues that they could lose money and fans if they don't choose Ticketmaster.

The Justice Department says Live Nation also threatened to retaliate against one firm if it didn't stop a subsidiary from competing for artist promotion contracts.

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Live Nation called the suit a possible "PR win for the DOJ in the short term," but said the entertainment company would prevail in court. The lawsuit "won't solve the issues fans care about relating to ticket prices, service fees and access to in-demand shows."

"There is more competition than ever in the live events market," it added.

Andrew Cash, president and CEO of the Canadian independent music association, says it's about time governments confront this issue.

He told CBC that small and mid-size venues are being squeezed out by Live Nation in Canada, which hurts the artists that rely on those venues.

"It would be a much more healthy and competitive atmosphere in the music ecosystem if there were more players, if there were more promoters, if there were more small and medium-sized promoters out there," Cash said.

Canada also approved 2010 merger

In 2010, the U.S. Justice Department approved Ticketmaster's controversial merger with Live Nation, with conditions intended to stop the combined company from harming competition, including that Live Nation agree not to retaliate against concert venues for using other ticket companies for 10 years. Canada's Competition Bureau also approved the merger.

In 2019, the DOJ investigated and found that Live Nation had "repeatedly" violated that agreement and extended the prohibition on retaliating against concert venues to 2025. That same year, Canada's Competition Bureau ordered Ticketmaster to pay a penalty of $4.5 million Cdn for misleading customers on online ticket sales, but also ruled the company's practice of recruiting scalpers to secretly purchase and resell Ticketmaster tickets for inflated costs was legal.

In 2020, a court extended most of the DOJ's oversight of the merger to 2025 because, the department said, Ticketmaster retaliated against stadiums and arenas that opted to use other ticketing companies.

Live Nation has said in the past that it was confident its business practices were legal, and that the probe had been prompted by complaints from rivals, including resellers.

When it was reported that the company was under federal investigation in 2022, the concert promoter said in a statement that Ticketmaster enjoys such a large share of the market because of "the large gap that exists between the quality of the Ticketmaster system and the next best primary ticketing system."

But competitor ticket sellers have long complained that Live Nation makes it difficult for them to disrupt the market with practices such as withholding acts if those venues don't agree to use Ticketmaster's service.

University of Victoria economics professor Pascal Courty says breaking up the companies would give artists more options, and could lead to some innovation and a small decrease in ticket prices.

"Now that we have an investigation, we're going to find out a lot. And that's going to allow us to understand the depth of the problem," Courty told CBC.

"I think we need to break up the stronghold between venue promotion and ticketing. Then we might want to also break up ticketing by region, or so that we encourage competition."

He says Live Nation could still try to maintain a monopoly in Canada even if it is forced to break up in the U.S., at which point the Competition Bureau would have to decide how to proceed.

Canada's recent federal budget document mentions high ticket prices at concerts and sporting events, and says the federal government will work with provinces and territories to adopt best practices that reduce unexpected charges and crack down on fraudulent sellers, but does not offer any plan to introduce enforceable measures.