The US Justice Department and a group of 30 states on Thursday filed a long-awaited antitrust lawsuit against Live Nation, accusing the concert giant of dominating the market and demanding that it and Ticketmaster be broken up. “It's time to break it up,” he said Attorney General Merrick Garland in a statement on Thursday.
The lawsuit, filed in Manhattan federal court, alleges that Live Nation has abused its enormous market power to stifle competition, including through the use of exclusive ticketing contracts that lock venues into Ticketmaster's use for all events. As part of its case against Live Nation, Garland said the government will present evidence obtained from emails between Live Nation CEO Michael Rapino and Oak View Group chief Tim Leiweke, as well as communications between Rapino and the head of the powerful equity firm Silver Lake capital. .
“We contend that Live Nation has repeatedly exercised its power to prevent its competitors from expanding into the US concert promotion market through threats and retaliation,” Garland said. In his submissions, he alleged that in 2021, Live Nation threatened to retaliate against Silver Lake unless it divested from TEG, one of its portfolio companies. According to Garland, Live Nation chief Michael Rapino told Silver Lake that he “didn't understand why [the equity firm] continued to invest in a business that competes with Live Nation.”
Garland added: “The threats eventually succeeded and Silver Lake tried to sell TEG as a whole. We argue that Live Nation does not maintain its dominance of the live industry by staying ahead of its competition on the ground. It does so by illegally eliminating its competition. We argue that Live Nation controls the live entertainment industry in the United States because it violates the law.”
To address the alleged violations, the DOJ argues that Live Nation must divest its ownership of Ticketmaster — effectively undoing a controversial 2010 merger that was approved by federal regulators despite fears it would give the company too much power over live music.
Live Nation has long faced criticism for its market share, but the company's scrutiny has increased dramatically following the disastrous ticketing for Taylor Swift's 2023 Eras tour in November 2022, which saw widespread service delays and website crashes.
The DOJ had already launched an investigation into the company's practices earlier in 2022, before the Swift incident. But poor sales sparked congressional hearings, civil antitrust suits and calls for the company to be broken up. Lawmakers such as Sen. Amy Klobuchar (D-Minn.), the chairwoman of the Senate Antitrust Subcommittee, warned that Live Nation's power “insulates it from the competitive pressures that normally push companies to innovate and improve services their”.
Live Nation has denied such allegations. In a blog post last month, the company's top antitrust lawyer argued that the “monopoly” allegations were designed to “incite fans against Live Nation and Ticketmaster.” As recently as Tuesday, company president Joe Berchtold said the company's practices were “entirely defensible” and that a settlement with the DOJ was still possible.
When Live Nation and Ticketmaster merged in 2010, the DOJ approved the deal but imposed a so-called consent decree aimed at preventing the company from abusing its position. Those restrictions were set to expire in 2020, but were extended by five years after the Justice Department accused Live Nation of repeatedly violating the order.
from our partners at https://www.billboard.com/business/legal/live-nation-antitrust-lawsuite-doj-monopoly-1235690940/