The Federal Trade Commission (FTC) recently filed a complaint against Ticketmaster and its parent company Live Nation Entertainment, alleging that they have abused their dominant position in the ticket sales market. The FTC alleges that Ticketmaster has monopolized the primary ticketing services market and has used its position to impose excessive fees on customers.
Background on Ticketmaster
Ticketmaster is the largest primary ticket seller in the United States, with a market share estimated at 70% or higher. It sells tickets for concerts, sports events, theater shows, and other live entertainment events on behalf of event organizers.
In 2010, Ticketmaster merged with Live Nation, the largest concert promoter in the US. Together they form Live Nation Entertainment, a company that promotes events, operates venues, manages artists, and sells event tickets.
Key Points of FTC Complaint
The FTC complaint makes the following allegations against Ticketmaster:
- Ticketmaster has monopolized the market for primary ticketing services in the US through anticompetitive conduct.
- Ticketmaster uses its dominant position to impose exorbitant fees on customers, generating hundreds of millions of dollars in revenue.
- Ticketmaster ties products and services together in anti-competitive bundles.
- Ticketmaster has entered into long-term exclusivity agreements with major venues and promoters to maintain its monopoly.
Monopolization of Primary Ticketing Market
The FTC states that Ticketmaster controls more than 80% of the primary ticketing services market in the US. It achieves this through exclusive deals with venues that prohibit competitors from selling tickets.
Venues are only permitted to use Ticketmaster’s ticketing services under these exclusive deals. This behavior has effectively blocked competitors from entering the market for decades.
Excessive Fees Imposed on Customers
Ticketmaster leverages its monopoly to charge customers excessive ticketing fees on top of ticket face prices. Customers are often hit with fees of 25%, 30% or even higher compared to the stated ticket price.
In 2019 alone, Ticketmaster generated $1.6 billion in revenue from fees, according to the FTC complaint. Customers have little choice but to pay the fees, due to the lack of competitors.
Anti-Competitive Bundling
The FTC states that Ticketmaster bundles its primary ticket services to venues together with its other products in an anti-competitive manner.
For example, it requires venues to also use its secondary ticketing services like TicketExchange. This prevents venues from using other secondary market platforms.
Exclusivity Agreements with Venues and Promoters
Ticketmaster uses long-term exclusivity agreements, some up to 10 years long, to maintain its monopoly over major venues.
Over 130 major venues are tied to Ticketmaster under these exclusive deals. Some agreements contain punitive clauses requiring venues to pay steep penalties if they use a competing ticketing provider.
Impacts on Consumers and Venues
The FTC complaint states that Ticketmaster’s actions have wide-ranging negative effects:
- Consumers suffer from higher ticket prices and excessive fees. They have no alternative platform to turn to.
- Up-and-coming ticketing platforms are unable to grow and compete. Innovation in ticketing services is stifled.
- Venues are prevented from shopping around for lower ticketing fees and better products.
- Artists are impacted through higher fees and limited choices.
Relief Sought by the FTC
To remedy the anti-competitive situation, the FTC is seeking the following relief measures:
- Prohibit Ticketmaster from using illegal tying practices that force venues to use multiple products together.
- Bar Ticketmaster from threatening or retaliating against venues that consider using another ticketing provider.
- Require Ticketmaster to license its ticketing software to competitors on reasonable terms, to allow independent platforms to grow.
- Establish an FTC monitoring process to ensure Ticketmaster complies with antitrust laws.
Response from Ticketmaster
Ticketmaster has rejected the claims in the FTC complaint. It states that the live entertainment industry is thriving, with increasing numbers of concerts and shows accessible to consumers at affordable prices.
It asserts that Ticketmaster does not have an unfair advantage, and that robust competition exists in ticketing markets. The company plans to defend itself vigorously against the FTC’s claims.
Conclusion
The FTC’s legal action against Ticketmaster represents a major confrontation between regulators and the dominant ticket sales platform in the US.
The outcome of the case could have far-reaching implications on consumer protection, market competition and innovation in the ticketing industry. Many complainants are hoping it will lead to better choice, lower fees and more fairness for customers.