The Senate Judiciary Committee is holding hearings on Ticketmaster and Live Nation’s merger and business practices due to concerns about their dominance in the live event ticket sales market and allegations of anticompetitive conduct.
What prompted the Senate Judiciary Committee to act now?
The Committee decided to hold hearings following several recent controversies involving Ticketmaster:
- In November 2022, Ticketmaster’s website crashed during presales for Taylor Swift’s upcoming tour due to extremely high demand. Many fans were unable to purchase tickets.
- Ticketmaster is facing multiple lawsuits alleging it facilitates ticket scalping and Price floors. In some cases, it has been accused of teaming up with scalpers.
- There are concerns about exorbitant fees Ticketmaster charges on ticket sales. Services fees routinely add 30% or more to base ticket prices.
These issues have led to growing public dissatisfaction with Ticketmaster and calls for scrutiny of its dominant market position.
What are the main concerns about Ticketmaster’s market power?
Ticketmaster sells primary tickets and dominates the market. The company has faced antitrust concerns for decades, going back to when it merged with Live Nation in 2010. The key concerns include:
- Ticketmaster often has exclusive contracts with large venues and artists that block competitors from selling primary tickets.
- It now owns major concert promoters like Live Nation that give it control over much of the live music industry.
- Ticketmaster has very high market share, estimated at 70% or more of primary ticket sales for major concerts.
- The lack of competition allows Ticketmaster to charge high fees that can add up to more than 30% to ticket prices.
This dominance and lack of alternatives frustrates consumers and artists alike.
What are the main allegations of misconduct against Ticketmaster?
Ticketmaster faces multiple allegations of anticompetitive or unethical business practices:
- It is accused of colluding with scalpers using bots to buy up large quantities of tickets for resale at higher prices.
- Ticketmaster allegedly has profit sharing agreements with large scale ticket brokers.
- The company is accused of intentionally underpricing tickets so they sell out quickly, driving fans to more expensive resale tickets.
- Artists have accused Ticketmaster of pressuring them to use its platform exclusively by threatening to give them smaller venues otherwise.
Consumer rights advocates say these practices exploit fans and highlight the perils of unchecked market power.
What other concerns are there about the Ticketmaster-Live Nation merger?
The 2010 merger between Ticketmaster and Live Nation created a vertically integrated company that has drawn many antitrust concerns over the years. Specific issues include:
- Live Nation is the largest concert promoter. Critics say it can freeze out competitors by directing its artists to partner exclusively with its Ticketmaster division.
- The combined company has end-to-end control over artists, venues, promotions, ticketing, resales which some argue stifles competition.
- Smaller competitors have accused Ticketmaster of retaliation when venues choose to partner with other ticketing companies.
These factors worry regulators and lawmakers about the lack of consumer choice, especially given Ticketmaster’s dominant size in ticketing.
What next steps could Congress or regulators take on Ticketmaster?
Lawmakers have several options following the hearings depending on what they uncover:
- Refer the case to the Justice Department for antitrust investigation and potential enforcement action against Ticketmaster.
- Pass legislation to promote more competition and transparency in the ticketing industry.
- Hold more Congressional oversight hearings to compel reforms, potentially calling Ticketmaster executives to testify.
- Request data from Ticketmaster on fees, volumes, and business practices to aid regulatory review.
- Push the FTC to probe allegations of unfair business practices and consumer harm.
Stricter scrutiny could force Ticketmaster to reform practices critics allege are monopolistic and harmful to consumers. But the company will likely argue it faces abundant competition and that allegations of misconduct are unfounded.
Conclusion
The Senate Judiciary Committee hearings on Ticketmaster represent growing dissatisfaction with its dominant position in live event ticketing. Years after its merger with Live Nation, concerns persist about lack of consumer choice, high fees, and potentially manipulative business practices. The hearings could lead to tougher oversight and regulatory action if lawmakers conclude Ticketmaster has abused its market power to the detriment of consumers and fair competition.