Ticketmaster is one of the largest ticket sales and distribution companies in the world. They sell tickets for concert, sports, and theater events on behalf of event organizers. Recently, Ticketmaster has come under scrutiny over allegations that they have violated anti-trust and consumer protection laws.
Anti-Trust Laws
Anti-trust laws aim to promote fair competition and protect consumers from predatory business practices that stifle competition. There are two main federal anti-trust laws that Ticketmaster may have violated:
- Sherman Antitrust Act – Outlaws monopolistic business practices that restrain interstate commerce and competition in the marketplace.
- Clayton Antitrust Act – Prohibits specific practices like price discrimination, tying arrangements, and mergers that may substantially lessen competition.
Ticketmaster enjoys a dominant position in the primary ticket sales market with an 80-90% market share in major U.S. venues. They have been able to maintain this position partially through exclusive deals with promoters and venues that restrict competitors from entering the marketplace. This may violate Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act.
Exclusive Dealing Arrangements
Ticketmaster utilizes exclusive contracts with promoters and venues, meaning the venues can only sell tickets through Ticketmaster. This locks out competitors from a majority of major concert venues and helps Ticketmaster maintain their control over primary ticket sales. These exclusive dealing arrangements make it very difficult for new ticketing companies to enter and compete in the market, which may violate Section 1 of the Sherman Act and Section 3 of the Clayton Act.
Abuse of Monopoly Power
With their market dominance, Ticketmaster may be illegally monopolizing the ticket sales market in violation of Section 2 of the Sherman Act. Their exclusive dealing contracts make it nearly impossible for competitors to gain a foothold in the ticket sales market. They have also been accused of predatorily underpricing tickets to drive competitors out of business. These behaviors seem aimed at wrongfully maintaining and abusing their monopoly power in the market.
Mergers and Acquisitions
Ticketmaster has expanded their reach and control over ticketing through multiple major mergers and acquisitions. In 2010, Ticketmaster merged with Live Nation, one of the largest concert and event promoters in the world. This created a vertically integrated company that has power over nearly every facet of the live event business. The merger may have substantially lessened competition in violation of Section 7 of the Clayton Act.
Consumer Protection Laws
In addition to anti-trust laws, Ticketmaster’s practices may also violate consumer protection laws that prohibit deceptive business practices and unfair competition:
- Federal Trade Commission Act – Empowers the FTC to prevent unfair methods of competition and unfair/deceptive acts affecting commerce.
- State Consumer Protection Statutes – Prohibit deceptive trade practices that harm consumers at the state level.
Some of the specific consumer protection issues with Ticketmaster include:
Hidden Fees
Ticketmaster has been criticized for tacking on excessive hidden fees during the checkout process that can increase ticket prices by 30% or more. These fees include ambiguous charges like “service fees” and “order processing fees” that critics argue are simply a way to squeeze more money from customers. Springing exorbitant fees at the last stage of checkout may qualify as a deceptive trade practice under the FTC Act and state consumer protection laws.
Misleading Price Advertising
Ticketmaster has also been accused of engaging in bait-and-switch price advertising. They will advertise ticket prices at one amount but then charge much higher prices when customers go to checkout. Customers feel tricked by the significantly higher actual ticket prices than advertised. This practice likely violates prohibitions on false advertising and deceptive pricing in the FTC Act and state laws.
Unfair Ticket Resale Policies
For resold tickets, Ticketmaster’s refund policy requires customers to seek refunds from whoever they bought the tickets from instead of Ticketmaster. However, Ticketmaster is the one who sets the ticket transfer policy that voids its own guarantees when ticket ownership changes hands. Critics allege that Ticketmaster wrongfully uses this transfer policy to avoid giving refunds itself. This practice may be an unfair and deceptive bait-and-switch by denying refunds that should be due to customers under Ticketmaster’s own guarantees and policies.
Potential Legal Actions
So what potential legal actions could Ticketmaster face based on these alleged violations?
- Federal antitrust lawsuit by DOJ or FTC
- State antitrust lawsuits
- Class action antitrust lawsuits
- Lawsuit by state attorneys general for consumer law violations
- Class action consumer lawsuits
- Civil penalties and injunctions
- Criminal antitrust prosecution (unlikely)
Here is a brief overview of each type of potential legal action:
Federal Antitrust Lawsuit
The Department of Justice (DOJ) or Federal Trade Commission could bring a federal civil lawsuit against Ticketmaster for violations of federal antitrust laws like the Sherman Act and Clayton Act. The federal government has previously sued Ticketmaster in 1994 over exclusive dealing and attempted to break up its 2010 merger with Live Nation. A new federal antitrust lawsuit could seek remedies like:
- Prohibiting Ticketmaster from entering new exclusive contracts
- Banning coercive tie-in sales tactics
- voiding past acquisitions and partnerships
- Breaking up the company
State Antitrust Lawsuits
State attorneys general could band together to file state antitrust lawsuits against Ticketmaster under state laws similar to the federal antitrust statutes. State antitrust laws also prohibit anti-competitive monopolistic practices. These cases are often filed together with federal antitrust suits and seek additional penalties and remedies at the state level.
Class Action Antitrust Lawsuits
Large groups of injured plaintiffs, like Ticketmaster customers or competitors, could potentially organize class action lawsuits against Ticketmaster for antitrust violations. These suits can claim damages under federal laws like the Sherman Act and Clayton Act. Recent lawsuits have alleged Ticketmaster’s conduct resulted in overcharges and fees for ticket buyers. Plaintiffs would need to affirmatively opt-in to the class in antitrust class actions.
State Consumer Protection Lawsuits
State attorneys general could also bring lawsuits under state consumer protection laws banning unfair competition and deceptive practices that harm consumers. These lawsuits have been used commonly in recent years to target abuses by tech companies. Possible remedies include:
- Ending deceptive pricing practices
- Restitution for injured consumers
- Civil penalties
- Corrective advertising
Class Action Consumer Lawsuits
Groups of consumers could potentially organize class action lawsuits against Ticketmaster under consumer protection laws like state UDAP statutes. These cases would focus on the fraudulent fees, misleading pricing, bait-and-switch refunds, and other deceptive conduct. They could seek compensation for overcharges paid by Ticketmaster customers.
Civil Penalties & Injunctions
Regulators like the FTC and state AGs can seek civil penalties and injunctions against Ticketmaster to fine and stop illegal anti-competitive and deceptive practices. Each violation can potentially carry significant monetary civil penalties up to the millions. Injunctions can prohibit Ticketmaster from entering exclusive dealing contracts, block further acquisitions, mandate changes to fee practices, and require clear disclosure of fees and prices to consumers.
Criminal Antitrust Prosecution
In egregious cases, DOJ may elect to bring criminal antitrust charges against a company and its executives. This typically requires clear intent and knowledge of wrongdoing. While not completely out of the question given some allegations against Ticketmaster, criminal charges are relatively unlikely in this situation compared to the other civil actions.
Recent Legal Actions Against Ticketmaster
Here are some recent notable legal actions that have actually been filed against Ticketmaster:
DOJ Review of Live Nation Merger
In 2019, the U.S. Department of Justice announced it would review Live Nation’s 2010 merger with Ticketmaster to evaluate whether they are complying with the initial antitrust settlement. DOJ is concerned the merger allowed Ticketmaster to abuse its power and will determine whether further action is warranted.
Class Action Antitrust Lawsuit
In 2018, Ticketmaster was hit with a major class action lawsuit alleging antitrust violations and anti-competitive conduct through coercive exclusive dealing contracts. The plaintiffs are seeking $5 billion in damages. The case is ongoing.
Class Action Refund Lawsuit
Customers filed a lawsuit in 2018 over Ticketmaster’s refund policies in relation to postponed events, arguing the practices are unfair and deceptive. Ticketmaster attempted to dismiss the case but a judge allowed it to proceed in 2022, noting that Ticketmaster did appear to contradict its own guarantees.
New York Consent Decree
In 2016, Ticketmaster agreed to a consent decree with the New York Attorney General to pay $4.5 million in penalties and restitution to settle deceptive pricing charges. Under the decree, Ticketmaster must clearly disclose added fees and the total ticket cost upfront to avoid further penalties.
Conclusion
In summary, Ticketmaster is facing intensive legal scrutiny for potentially violating federal and state antitrust laws prohibiting anti-competitive practices as well as consumer protection laws banning unfair and deceptive conduct. Their exclusive dealing contracts, hidden fees, misleading price advertising, and other actions appear aimed at exploiting consumers and monopolizing the ticket sales market. Ongoing and future lawsuits will continue to put pressure on Ticketmaster to reform its controversial business practices. Without meaningful changes, Ticketmaster will likely continue to draw the ire of regulators, competitors, and customers alike through legal action.