The Ticketmaster scandal in Mexico refers to a controversy surrounding Ticketmaster’s operations in the country. In 2022, an investigation by Mexican authorities found evidence of anti-competitive practices by the company, including artificially inflating ticket prices and colluding with venue operators. The scandal has raised questions about Ticketmaster’s business tactics and sparked outrage among consumers in Mexico’s live entertainment industry.
What led to the investigation of Ticketmaster in Mexico?
Concerns about Ticketmaster’s conduct in Mexico first emerged in 2021, when consumers and event promoters began accusing the company of monopolistic behavior. Specific allegations included:
- Imposing excessively high fees and service charges on tickets
- Pressuring venues to grant Ticketmaster exclusive ticket sales rights
- Blocking venues from selling tickets except through Ticketmaster
- Making it difficult for competitors to enter the primary ticket sales market
In light of the allegations, Mexico’s Federal Economic Competition Commission (COFECE) opened an investigation into Ticketmaster in October 2021. The probe examined whether Ticketmaster had abused its dominant position in Mexico’s live entertainment ticketing market.
What did the COFECE investigation uncover?
The COFECE investigation, which lasted around 6 months, uncovered extensive evidence of anti-competitive and abusive behavior by Ticketmaster in Mexico. Key findings included:
- Ticketmaster pressured venues to sign exclusive multi-year contracts that gave it control over 100% of primary ticket sales.
- The company threatened venues who did not comply with cancellation of events or refusals to service their events.
- Ticketmaster imposed terms and conditions that made it hard for venues to use other ticket vendors.
- It manipulated ticketing software to make it difficult for venues to check how tickets were allocated and priced.
- Ticket prices on Ticketmaster were higher on average compared to other vendors.
Based on this evidence, COFECE ruled that Ticketmaster had abused its dominant position and engaged in anticompetitive conduct illegal under Mexico’s competition laws.
What penalties did Ticketmaster face in Mexico?
In June 2022, COFECE announced a series of tough sanctions against Ticketmaster for its anti-competitive practices in Mexico:
- A fine of 21 million Mexican pesos (around $1 million USD) for collusive exclusive dealing.
- A separate fine of 1.2 million pesos for failing to cooperate fully with the investigation.
- A ban on reaching exclusivity agreements with venues longer than 1 year.
- A requirement to disclose service fees charged to venues upfront.
- Mandatory periodic reporting to COFECE on Ticketmaster’s commercial practices.
These penalties were the culmination of COFECE’s efforts to punish Ticketmaster and establish fairer competitive conditions in Mexico’s live entertainment market.
How did Ticketmaster respond?
Ticketmaster pushed back strongly against the investigation findings and penalties. The company argued that:
- Its exclusive ticketing deals helped venues plan events and were mutually beneficial.
- Service fees were clearly disclosed and reflected costs of providing ticketing services.
- It faced robust competition from other ticketing companies in Mexico.
- The fines and sanctions were unreasonable and excessive.
Despite its protests, Ticketmaster ultimately agreed to comply with the remedies ordered by COFECE. However, the company continues to dispute COFECE’s ruling that it engaged in anticompetitive behavior.
What was the impact in Mexico’s live entertainment industry?
The Ticketmaster scandal and COFECE’s intervention had major ripple effects across Mexico’s live entertainment sector:
- Lower ticket prices – Prices for events fell 10-15% on average after the COFECE decision as Ticketmaster reduced fees.
- More choices – Smaller ticketing companies entered the market, giving consumers and venues greater options.
- Shorter contracts – Venues moved away from lengthy exclusive contracts with Ticketmaster.
- Greater transparency – Upfront disclosure of fees to venues was mandated, removing hidden costs.
The combined impact was a loosening of Ticketmaster’s former stranglehold on ticketing and a shift toward a more competitive, consumer-friendly environment.
What has been Ticketmaster’s recent behavior in Mexico?
In the year since the scandal, Ticketmaster has been careful to avoid behavior that could trigger further scrutiny from COFECE:
- It has signed exclusivity contracts of 1 year or less with venues.
- Service fees are disclosed upfront rather than hidden.
- No venues have complained recently of pressure or threats from Ticketmaster.
- The company is fulfilling mandated reporting requirements to COFECE.
While some industry sources think Ticketmaster still holds too much sway, its conduct appears to have been reined in significantly by the regulatory action.
Could the scandal spread beyond Mexico?
The scandal has raised concerns that similar anti-competitive practices by Ticketmaster could be happening in other countries as well. Outside Mexico, Ticketmaster also holds a very dominant position in primary event ticketing.
Watchdog groups in the USA, Canada and Europe have called for investigations into Ticketmaster’s tactics in their jurisdictions following the precedent set in Mexico. While no formal probes have been announced yet, the possibility remains that the company could face scrutiny elsewhere if evidence of unfair monopolistic behavior emerges.
Conclusion
The Ticketmaster scandal in Mexico highlighted the dangers of unchecked monopolies in live entertainment ticketing. Thanks to the decisive actions by COFECE, fairer competition was restored to the benefit of consumers, venues and smaller rivals. The episode will hopefully serve as a cautionary tale for Ticketmaster and other dominant firms that engage in anticompetitive practices.