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Californian judge likely to deny Ticketmaster’s latest attempt to force customer dispute to arbitration

By | Published on Friday 11 August 2023

A Californian judge looks increasingly likely to deny attempts by Live Nation and Ticketmaster to force a lawsuit accusing the live giant and its ticketing business of anti-competitive practices to arbitration. That’s because of a decision by Ticketmaster to change its chosen arbitrator, with attempts to justify that change on cost efficiency grounds failing to convince the judge.

Over the years Ticketmaster has managed to force various legal disputes with customers to arbitration – rather than having those disputes being fought out in public in a court of law – because the ticketing firm’s terms and conditions have an arbitration provision in them.

Attempts by customers to argue that no one reads those terms and conditions and therefore the arbitration provision should not be enforced have generally been unsuccessful.

However, Ticketmaster then switched its chosen arbitrator from a company called JAMS to a company called New Era. It argues that the latter company is better equipped to deal with complaints where there are lots of concurrent complainants, which is common in the ticketing market.

But some of those complainants have claimed that New Era is biased in favour of the ticketing firm, and that the processes employed by the company – and which complainants are forced to navigate – are “non-traditional” and “Kafkaesque”.

This has all become a big talking point in a lawsuit filed by some Ticketmaster customers that accuses Live Nation and its ticketing businesses of anti-competitive conduct. Of course, plenty of people have made similar allegations over the years, ever since Live Nation and Ticketmaster merged back in 2010.

Live Nation has always strongly denied those allegations, but could probably do without claims of that kind being discussed in public in court. Especially given its dominance of the live entertainment market has become a political talking point in Washington once again.

In terms of the shift from JAMS to New Era, both the how and the why for that shift have been discussed as this dispute has gone through the motions. The plaintiffs have argued that Tickemaster “slid this change into terms that most consumers had previously agreed to, without flagging the dramatic shift being made”.

And last month judge George H Wu also expressed concerns about the way the change was made. “There are questions as to why there wasn’t any notice of this provided”, he said, noting that providing such a notification would be relatively cheap and easy to do. “It boggles the mind as to why that wasn’t done here, just to give some sort of notice for people potentially going onto the site”.

According to Law 360, at another court hearing this week, lawyers for Live Nation again stressed that the move to New Era was mainly motivated by it being better to deal with cases where many complainants have the same complaint. And that results in significant cost savings, an attorney added, because with JAMS there is a cost associated with each complainant.

But Wu didn’t seem particularly sympathetic to that argument. He noted that the courts are actually well set up to deal with cases where many complainants have the same complaint, because that’s what class actions are designed for. So if arbitration isn’t practical, why force that approach on a dispute? And if you choose ‘class arbitration’, well, maybe you have to deal with the consequences.

“There’s a normal way that these things are resolved”, the judge observed, and that “is through class action. [But] they want to avoid class actions, for one reason or another, and so therefore they decide, ‘Well, let’s force them into arbitration individually and let’s also include class arbitrations’. So that’s the situation that results”.

Although Wu didn’t make a final decision on all this during the hearing itself, that decision is imminent.