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US government investigation into Live Nation could result in legal action this autumn

By | Published on Monday 31 July 2023

Live Nation

The US Department Of Justice could file a competition lawsuit against Live Nation and Ticketmaster later this year, according to sources who have spoken to Politico. However, a spokesperson for the live giant insists that is unlikely based on the company’s ongoing conversations with the American government department.

Live Nation’s EVP for Corporate And Regulatory Affairs, Dan Wall, said in a statement on Friday: “We’re in regular contact with the DoJ and they haven’t told us they think we’re doing anything illegal or asked us to address any concerns. It would be highly irregular for the DoJ to file without that notice and a lot of dialogue afterwards. However, if they do file we are prepared to defend ourselves”.

The market dominance of Live Nation and Ticketmaster in the US live entertainment business has been a big talking point ever since the two companies merged in 2010.

In order to get regulator approval of that merger, Live Nation negotiated a consent decree with the DoJ setting out a number of commitments that were designed to allay the competition law concerns created by the biggest concert promoter joining up with the biggest ticketing company.

That consent decree was due to expire in 2020, but after the DoJ accused Live Nation of six breaches of the agreement, a new deal was negotiated that kept those commitments in force for another five years.

The market dominance of Live Nation has also slipped back into the spotlight in US Congress of late, mainly following the meltdown that occurred when tickets for Taylor Swift’s American tour went on sale via Ticketmaster last year.

That has resulted in a number of legislative proposals for changing the way the ticketing business is regulated, one set of which is specifically focused on the dominance of Ticketmaster.

For its part, Live Nation has tried to steer the debate in Washington onto other ticketing issues. In particular, supporting the push for all-in-pricing, so that all ticketing platforms in the US start declaring the full cost of a ticket upfront, rather than adding fees and commissions at the end of the transaction. Fees added at the last minute like that are a particular bugbear of US President Joe Biden at the moment, so that’s a pretty good distraction tactic.

It has also proposed some new regulations for the secondary ticketing market, which would impact on Live Nation – because Ticketmaster is still involved in ticket resale in the US – but less so than with any new laws targeting primary ticketing.

The latest investigation by the DoJ into whether or not Live Nation is abusing its market dominance – or breaching its consent decree – is seemingly unconnected to all the conversations happening in Congress, and wasn’t prompted by the Swift ticketing debacle. According to sources who have spoken to Politico, the latest DoJ investigation began last summer.

“Live Nation executives were told early on that the investigation is largely focused on the Ticketmaster side of the business”, it reports, “and the DoJ has asked questions on topics including prohibitions on reselling tickets and exclusive deals with venues to only use Ticketmaster. The DOJ has also asked questions about contracts for artist tours”.

The sources confirm that conversations between the DoJ and Live Nation are still at an early stage, which is why Wall reckons there will be no litigation on any of this as soon as this autumn.

Although, Politico reports, “the DOJ is moving quickly and its litigation team is involved”, adding that: “Jonathan Kanter, the DOJ’s antitrust head, has said one of his goals is to speed up the investigative process and bring cases to trial more quickly”.

“Because of the federal scrutiny dating back more than a decade and the voluminous information the government is getting from third parties”, it goes on, “it might not be necessary to have all of the information that the DoJ is seeking from the company in advance of filing a lawsuit, three people with knowledge of the case said. Instead the DoJ could seek that information during the discovery process”.

That said, Politico also notes that the DoJ’s antitrust team is very busy at the moment, and quite how quickly any investigation into Live Nation proceeds may come down to what resources are available to investigators. And, its sources have stressed, “the timing of any lawsuit is fluid and no final decision has been made, meaning the department could ultimately decide not to bring a case”.

And, even if the investigation does proceed with some speed, Live Nation could as yet reach a new out of court settlement with the regulator. Though, Politico also says, “Kanter has said repeatedly that he prefers to litigate rather than settle enforcement actions”. We shall see.