In the 1990s, Ticketmaster was involved in several major lawsuits that challenged its dominant position in the ticketing industry. The company had acquired and merged with many of its competitors, giving it control over a large percentage of major concert venues and promoters. This prompted concerns about anti-competitive behavior and monopolistic control over ticket prices and fees.
Pearl Jam sues Ticketmaster
One of the most high-profile lawsuits against Ticketmaster in the 90s was filed in 1994 by the band Pearl Jam. Pearl Jam was one of the biggest rock bands in the world at the height of their fame, and they willingly chose to play smaller venues to keep ticket costs low for fans. However, Ticketmaster still charged high service fees on top of the ticket price that drove costs up.
Pearl Jam alleged that Ticketmaster was engaging in anti-competitive conduct through exclusive contracts with promoters and venues that forced all parties to use Ticketmaster for ticketing services. They claimed these exclusive deals allowed Ticketmaster to charge excessively high fees that ultimately hurt consumers. Pearl Jam attempted to tour without using Ticketmaster but found it nearly impossible to find suitable large venues that weren’t tied to exclusive contracts.
The band’s lawsuit against Ticketmaster was filed in the U.S. District Court of Illinois. It accused the company of violating Sections 1 and 2 of the Sherman Antitrust Act by unlawfully monopolizing the ticket distribution market. However, the court ultimately dismissed most of Pearl Jam’s claims and ruled in favor of Ticketmaster. An appeals court later affirmed this decision. Though the lawsuit failed, it drew major attention to concerns about Ticketmaster’s business practices.
Settlement with the Justice Department
In 1995, Ticketmaster reached a settlement agreement with the U.S. Department of Justice over anticompetitive concerns related to its mergers and acquisitions. The DoJ had been investigating Ticketmaster over potential violations of antitrust laws since the early 1990s as the company continued to acquire or merge with competitors like Ticketron.
Under the settlement terms, Ticketmaster and its parent company Ticketmaster Group Inc. agreed to license their ticketing software to competing ticketing companies. They also agreed to divest assets and ownership stakes in some joint venue ventures to address monopoly concerns. Additionally, Ticketmaster consented to being barred from entering into exclusive contracts with promoters and venues for several years.
The settlement agreement with the DoJ forced Ticketmaster to open up its ticketing services to more competition. However, some critics argued the terms did not go far enough in limiting Ticketmaster’s power within the industry.
Class action lawsuit over order processing fees
A major class action lawsuit was filed against Ticketmaster in 2003 that accused the company of deceiving customers by hiding the full costs of tickets and fees. The lawsuit took issue with Ticketmaster collecting processing fees on ticket orders without sufficiently disclosing those fees upfront to customers.
The case was filed in Los Angeles Superior Court against both Ticketmaster and its parent company at the time, USA Media Group. It alleged violations of unfair competition and false advertising laws. The plaintiffs argued that order processing fees constituted part of the base ticket price and therefore should have been disclosed from the beginning rather than tacked on late in the order process.
The class action lawsuit covered Ticketmaster customer orders between October 21, 1999 and February 27, 2003. After several years of litigation, the case reached a settlement in 2008. Under the approved settlement terms, Ticketmaster provided discount codes and vouchers to over 50 million customers who purchased tickets during the class period. The settlement was estimated to be worth around $35 million in benefits to consumers.
Live Nation Merger Leads to New Antitrust Concerns
In 2009, Ticketmaster proposed a merger with Live Nation, which was one of the world’s largest concert and event promoters at the time. The merger raised fresh monopoly concerns, given that Live Nation owned, operated, or exclusively booked many major U.S. amphitheaters and concert venues. Critics warned combining the two companies would lead to further consolidation of power within the live entertainment industry.
To address antitrust issues, Ticketmaster and Live Nation agreed to let venues retain ticketing rights and contract ticketing services out to different providers. They also agreed the combined company would license ticketing software to AEG, which was Live Nation’s largest competitor in event promotion. Additionally, the companies pledged to subject themselves to anti-retaliation provisions that prohibited punishing venues that chose to use other ticketing services.
With those remedies in place, the Ticketmaster-Live Nation merger was approved in 2010. However, some industry members remained unsatisfied and raised concerns in the following years about the effectiveness of those remedies. In 2018, the U.S. Department of Justice launched an investigation into possible antitrust violations by Live Nation after complaints of coercive practices.
Conclusion
Ticketmaster faced numerous legal challenges in the 1990s and 2000s from both the government and private parties related to alleged monopolistic and anti-competitive conduct. Lawsuits came from major groups like Pearl Jam, government agencies like the DOJ, and large classes of customers. Settlements and mitigation measures helped open the ticketing market up to more competition. However, some concerns persisted even after Ticketmaster’s merger with Live Nation. Antitrust allegations have continued against the merged company in more recent years as well.