A DOJ Investigation is the Ticket to a Fairer Market for Live Music and Sport Fans
This week, U.S. House of Representative members Buck, Gaetz, McBath, and Sensenbrenner asked the Department of Justice to look into anti-competitive actions taken by Ticketmaster and Live Nation — and they were right to do so.
Ten years ago, the Department of Justice approved the merger of Ticketmaster and Live Nation in a 10-year consent decree that expires in 2020. The consent decree was an agreement between DOJ and Ticketmaster-Live Nation where Ticketmaster made certain promises in return for being allowed to merge their businesses. For example, Ticketmaster can’t “retaliate” against any venue that wants to use a different service. This approved vertical merger allowed the dominant ticketing platform to merge with the largest promoter of concerts.
Ticketmaster plans to mandate that ticket owners can sell their concert tickets only through the company’s own platform — so that it can charge ticket owners extra fees just to sell their ticket if they no longer want it.
The merger was allowed at the time because it was believed that it would actually lead to more competition in the market. But instead we’re now seeing Ticketmaster abuse its market dominance to harm consumers.
Since the Ticketmaster-Live Nation merger approval, Ticketmaster grew to dominate 70–80% the primary ticket sales market. Investigations soon found that Ticketmaster has even been holding back huge amounts of tickets from public sales so Ticketmaster could unfairly limit the supply of tickets and therefore raise prices on fans.
Imagine your daughter wants to go see Ariana Grande in concert, but when you check for tickets it looks like there’s barely any left. Because you’re keen to get tickets before they’re sold out, you spend more than you were planning to — maybe much more. Yet a few days later, you find out that there are actually plenty of tickets still on sale.
This is because sometimes Ticketmaster will holdback tickets from the general sale, wait for prices to rise on the secondary ticket market and then dump the tickets at the higher prices. By artificially limiting ticket availability, Ticketmaster can charge fans much more money.
Ticketmaster is evidently not content with dominating the primary ticket sales market.
It continues to amass incredible market dominance and abuse this dominance to block competitors and harm consumers. Left further unchecked by the FTC or DOJ, Ticketmaster plans to mandate that ticket owners can sell their concert tickets only through the company’s own platform — so that it can charge ticket owners extra fees just to sell their ticket if they no longer want it.
Representatives Buck, Gaetz, McBath, and Sensenbrenner are right to call on the DOJ to engage in a deep review of anti-competitive practices by Ticketmaster. Market power is not inherently bad, but when bad actors like Ticketmaster use it to harm their consumers, that is the exact moment when the FTC should step in.
In 2010, the FTC and DOJ put its trust in Ticketmaster to use its market power for good. A decade later, it’s clear that Ticketmaster has betrayed our trust — and now it’s up to the DOJ to make the concert ticket market serve consumers once again.