This article is by Xan Wolstenholme-Britt, John McKnight, and Sarah Chu
The lawsuit against Live Nation Entertainment (“Live Nation”), Ticketmaster’s parent company, has over 340 plaintiffs alleging that Live Nation harmed consumers by engaging in price-fixing and violating anti-trust laws. Ticketmaster utilizes a program called the “Verified Fan” to provide presale codes to fans purchasing tickets on their platform. However, during ticket sales for the 2023 Taylor Swift Eras Tour, the system crashed, and it failed to support the high volume of presale code requests, depriving millions of fans of the opportunity to purchase tickets.
Addressing Consumer Harm
The ongoing Swift lawsuit is a reminder that private parties can bring anti-trust claims under federal and state antitrust laws. While state laws vary, the Clayton Act provides the legal basis for commencing a private antitrust action.[1] Pursuant to the federal statute, parties bringing an action must demonstrate antitrust injury and standing. Parties can also pursue class actions, if the court certifies the class, and the named claimants establish that: 1) there are numerous members; 2) there are common questions of law or fact; 3) the representative parties’ claims are typical of the class; and 4) the action will fairly protect the interests of the class. The statute of limitations is four years.
Implications for Investors and Shareholders
The Swift debacle also brings attention to a merger between Live Nation and Ticketmaster that was approved in 2010. Among other things, the purpose of the merger was to reduce inefficiencies in the live events space and prohibit Live Nation from retaliating against another venue for using a ticketer other than Ticketmaster. That same year, the Department of Justice (“DOJ”) required Ticketmaster to make significant changes to its merger with Live Nation, including subjecting the company to anti-retaliation provisions. Despite the prohibitions, in 2019, the DOJ’s Antitrust Division found that Live Nation had repeatedly engaged in conduct that failed to preserve and promote ticketing competition.
Today, Ticketmaster controls 70% of the ticketing market and profits from initial and resale ticket sales without competition, resulting in high fees that can make up 37% of ticket prices. After the 2010 merger, Ticketmaster increased their market share across the live entertainment industry while maintaining their monopoly power. During the Eras Tour, when Swift inquired as to whether Ticketmaster could handle the high demand, it represented that it could. The company had made the same misrepresentations to the DOJ in 2010, when it promised a more efficient ticketing system, free of anti-trust violations.
As Ticketmaster’s parent company, Live Nation is obligated to disclose accurate information to investors and shareholders so that they make informed investment decisions. A corporation’s failure to disclose to its investors that a significant portion of its profits were obtained through a fraudulent scheme that violated anti-trust laws or that the corporation used a defective program potentially posing risks to investors could implicate securities laws.
Our team at Sanford Heisler Sharp represents whistleblowers exposing fraud in various avenues and industries. If you have any questions or concerns about securities fraud at your company or think that you need to report anti-trust violations, please do not hesitate to contact our firm. You can fill out our online intake form to request an initial consultation.
[1] The Clayton Act provides, in pertinent part, that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefore in any district court of the United States in the district in which the defendant resides or is found or has an agent.”