The antitrust chatter over the alleged (and at times apparent) monopoly of tech companies has been gaining ground globally and especially in the US, EU, and UK. Reportedly, the US Justice Department is preparing to file an antitrust suit against Ticketmaster parent Live Nation over allegedly abusing its market-leading position.

Live Nation stock is unsurprisingly down sharply in US premarket price action today as markets weigh the fallout from the proposed suit.

Citing people familiar with the matter, the Wall Street Journal first reported that the Justice Department “is preparing to file an antitrust lawsuit against the Ticketmaster parent in the coming weeks that would allege the nation’s biggest concert promoter has leveraged its dominance in a way that undermined competition for ticketing live events.”

Is Anyone Surprised?

To be sure, the antitrust lawsuit (if it eventually happens) shouldn’t come as a surprise to anybody – more so to Taylor Swift fans, popularly known as Swifties, after last year Live Nation horribly botched ticket sales of Swift’s upcoming tour.

For context, Ticketmaster stopped the sales of tickets for Swift’s hugely popular Eras tour and blamed it on ticket bots that buy tickets in bulk the moment they are released. Those who got tickets had to pay incredibly high prices, making everyone involved upset. Even Swift lashed out at Ticketmaster without naming the company and said in an Instagram story, that it’s “excruciating for me to just watch mistakes happen with no recourse.”

Ticketmaster is able to force prices up because it owns a defacto monopoly on ticket sales. It has deals with venues across the nation to buy many if not all of the tickets for events and then pumps prices up dramatically to price gouge its consumers who have no other choice.

After the fiasco, a Senate investigation subcommittee issued a subpoena to Live Nation with Sen. Richard Blumenthal, D-Conn writing in his letter “Live Nation has egregiously stonewalled my Subcommittee’s inquiry into its abusive consumer practices — making the subpoena necessary.”

Customers Have Been Short-Charged by Live Nation

To be sure, the fiasco over tickets for Taylor Swift’s tour was hardly the first time (or even the last time) that Ticketmaster left out customers in the cold. In December, thousands of fans with valid tickets from Live Nation were denied entry at the Bad Bunny concert in Mexico City, which the company blamed on an “unprecedented number of fake tickets” bought from vendors.

Unfortunately, these kinds of problems d0n’t seem to be rare occurrences. There have been a ton of such issues with ticketing from Ticketmaster where customers were short-changed in various ways.

The Senate Judiciary Committee Grilled Live Nation

In January, the Senate Judiciary Committee grilled Live Nation with Sen. Amy Klobuchar, (D-MN) accusing the company of monopoly in her opening comments. Echoing her comments, Jack Groetzinger who is chief executive of the rival ticketer SeatGeek, said, “The only way to restore competition in this industry is to break up Ticketmaster and Live Nation.”

Following the hearing, Klobuchar and Mike Lee (R-UT) wrote a bipartisan letter to Live Nation President and Chief Financial Officer Joe Berchtold.

The letter said, “As the hearing demonstrated, there is a strong bipartisan consensus about taking steps to improve the way America’s ticketing industry functions. We must ensure that we have competition in the market to drive down prices, encourage companies to innovate, and give consumers choice.”

The letter asked Live Nation several questions, asking it to respond by February 15. These included.

  • Whether Live Nation disputes the testimony of Jerry Mickelson, CEO and President of Jam Production who said 87% of Billboard’s Top 40 Tours in 2022 were performed at venues ticketed by Ticketmaster. In his testimony, Mickelson also said that 87.5% of NHL teams, 87% of NBA teams, and 93% of NFL teams have exclusive ticketing agreements with Ticketmaster
  • It asked whether, over the last three years, Live Nation entered into any agreements with venues for ticketing services contracts longer than five years
  • The letter also asked whether Live Nation will commit to third-party audits to confirm that it is not threatening or retaliating against venues that select other ticketing service providers in 2026 and beyond.

Senators Called for Antitrust Action Against Live Nation

The Senators wrote another letter later in February after Live Nation apparently failed to answer their questions to satisfaction. The letter said the Senators find Live Nation’s response amounts to “trust us” which they find “wholly insufficient.”

The letter added, “We thank you for your prompt attention to these matters and encourage the Antitrust Division to take action if it finds that Ticketmaster has walled itself off from competitive pressure at the expense of the industry and fans.”

Live Nation’s Merger with Ticketmaster Was Always Problematic

To be sure, Live Nation’s merger with Ticketmaster should never have been allowed in the first place. It created a ticketing behemoth, raising fears that the company might abuse its leading market position to the detriment of customers. It seems like they were right.

The Justice Department settled with Live Nation during the 2010 merger with Ticketmaster and declined to block the merger.

There is endless empirical evidence that the apparent monopoly is hurting customers and over the last two decades, ticket prices for live events for the top 100 tours have risen by 400% which exceeds inflation by 334%.

To be sure, one shouldn’t really expect concert prices to move in line with inflation, but the massive gap between the two looks at least in part due to the near monopoly that Live Nation and Ticketmaster are enjoying.

Also, the average service fee is between 27%-31%, but it can go as high as 75% in some cases. While these fat service fees are fueling Live Nation’s profits – its operating income jumped 46% to $1.07 billion last year – it is also leading to painfully high ticket prices for consumers.

Consumers Are Paying the Price for Ticketing Monopoly

As the demand for live concerts has skyrocketed after the COVID-19 lockdowns, the situation has gotten even worse.

Along with paying higher prices, customers are being awarded poor customer service and many cases are being denied legible returns. For instance, some customers allege that they were denied returns or refunds by Live Nation even as Black Pumas did not play at the 2022 Outlaws Festival at Shoreline.

Meanwhile, Live Nation has been in the Justice Department’s crosshairs before. In 2019, the Department modified its agreement with the company, accusing it of bullying concert venues. The new agreement which would run until 2025, among others has provisions that “Live Nation may not threaten to withhold concerts from a venue if the venue chooses a ticketer other than Ticketmaster.”

All said allegations of antitrust don’t look out of place because Ticketmaster now has an almost 80% market share in major concerts.

As the Justice Department hopefully looks into allegations of Live Nation’s monopoly through its antitrust case, customers would expect lower prices and better customer service – something which they demand and rightfully deserve after spending a humongous amount on tickets for live concert events.