Breaking down the DOJ's lawsuit against Live Nation

Live Nation Entertainment controls a reported 80-percent market share of major concert venues across the country and purports to be “the largest live entertainment company in the world.” In May 2024, the Department of Justice filed an antitrust lawsuit against the company claiming it acquired its monopoly power through anticompetitive and exclusionary behavior. This lawsuit contrasts with the Obama administration’s approval of the Live Nation-Ticketmaster merger back in 2010 that allowed the conglomerate to form, despite worries at the time that the new company could stifle competition.

Since the lawsuit’s announcement, event attendees across the country have asked how a judgment against the company might affect them and possibly change the live entertainment industry as a whole. UW Law Professor from Practice Douglas Ross answers these questions and provides additional background on the pending case.

UW Law: Why is the Department of Justice suing Live Nation?

Douglas Ross: I can give an answer to that in two words: Taylor Swift. A year and a half ago, Taylor Swift announced her famous Eras Tour. Ticketmaster, which oversaw ticketing for that tour, broke down when tickets were released and was unable to handle the volume.

Another is the Department of Justice’s investigation of Live Nation's acquisition of Ticketmaster back in 2010. This was during the Obama administration, which ultimately decided to let the acquisition go through. The DOJ added many conditions to that acquisition to try to preserve competition. The conditions were supposed to expire in 2020, but the Department of Justice, at that time, extended the conditions for five more years. The conditions were about to expire this year when the Department brought this lawsuit.

So, where did this come from? It comes from history: the acquisition of Ticketmaster as well as the notorious disaster surrounding the ticket sales for the Taylor Swift Eras Tour.

UW Law: Is a monopoly always unlawful under antitrust law?

Ross: No. In the United States, having a monopoly isn't unlawful unless you got that monopoly by using anticompetitive means and excluding competition. Even if you built a better product because you're better at something than your rivals, you could still be guilty of monopolization if you exclude competition and prevent people from coming into your market and competing with you.

UW Law: What are some examples of how the Department of Justice claims that Live Nation asserted its monopoly power and engaged in exclusionary or predatory acts?

Ross: The Department of Justice, in one sense, is attacking the entire Live Nation-Ticketmaster business model. The DOJ complaint, which is well over 100 pages long, cites all sorts of examples of what the Department believes is anticompetitive conduct. For example, the Department charges Live Nation with monopolizing ticketing concert venues, which they say includes entering into exclusive agreements with third-party venues and having those venues only use Ticketmaster.

The Department also charges Live Nation with monopolizing promotional services. They argue that Live Nation has retaliated against companies trying to enter or expand into the promotion space. The Department claims that Live Nation entered into exclusive promotional agreements with artists and its venues, requiring them to only use Live Nation for their concert promotion, effectively excluding third-party promoters from using Live Nation's venues.

UW Law: What is Live Nation's response to the lawsuit?

Ross: Live Nation has responded forcefully. They say this is an attack on their business model, a model that has created efficiencies that help artists, venues and concertgoers. For example, the Department says these exclusive agreements with third-party venues where Live Nation oversees promotion and ticketing on the venue’s behalf are unlawful. Live Nation says, “nonsense,” as that is the typical way in which business is done in this industry. Venues have asked for exclusives because they feel they get better deals if they have one promoter and one ticketing company rather than multiple companies.

Another example is by “tying” — or an arrangement where I sell you one thing on the condition that you also buy another. Sometimes those are unlawful and sometimes they aren't. Here, the Department states that Live Nation says that if you want to rent venues that we control — Live Nation owns or manages many venues across the U.S. — you have to use Ticketmaster services. Live Nation says, first, as a factual matter, that's not what they're doing. But beyond that, Live Nation says it shouldn't be that surprising that somebody who owns a venue may want to control ticketing to that venue.

So, these are good examples of what's going to happen in this lawsuit. The Department says much of Live Nation’s conduct is anticompetitive, and Live Nation says their conduct is what promoters and ticketing companies engage in as routine, ordinary business behavior.

UW Law: How might a judgment against Live Nation affect event goers?

Ross: A judgment against Live Nation could affect event goers profoundly, or it could have very little effect. It ultimately depends on what that judgment is. If Live Nation loses this lawsuit, the Department of Justice wants to force the divestiture of Ticketmaster. They want the merger that occurred in 2010 to be undone and for Ticketmaster to be spun off as a standalone company, separate from Live Nation.

UW Law: Any other thoughts on this case?

Live Nation is pushing back strenuously against the idea it must spin off Ticketmaster and, I think, Live Nation has a point here. Much of what the DOJ complains about doesn't have to do with the integration of these two companies but has to do with each of the companies as standalone firms. So, in my view, separating them isn't going to solve many of the asserted problems.

DOJ argues divesting Ticketmaster will lead to lower prices, but Live Nation is saying exactly the opposite. If you break up these two companies, you're going to lose efficiencies that occur when a promoter and a ticketer are one and the same. And, Live Nation says, that will lead to more inconvenience — not less — for fans, and eventually higher prices, and a worse system.

Ultimately, it comes down to the question of “Do you think integrating the ticketing company with a promoting company creates efficiencies?” Back in 2010, the Department of Justice thought so and that's why the Department let the deal go through with some guardrails in place to protect against anticompetitive effects. Today's Department of Justice, however, doesn't believe there are efficiencies in that integration. Instead, it believes that integration hurts fans, and so they want to undo that deal.

Keep in mind, it'll still be a year or two before we get any answers to this because it'll take that long to go through discovery and the trial.