For now, Live Nation deal is just a ‘Band Aid,’ says antitrust scholar

In a 2024 lawsuit, the Justice Department’s Antitrust Division accused Live Nation Entertainment and Ticketmaster, which is owned by Live Nation, of illegally stifling competition at the hundreds of venues Live Nation operates across the United States. The DOJ claimed that the companies artificially drove up ticket costs for concertgoers. The department sought a breakup of the two companies, which merged in 2010. However, last week, while a trial was underway in federal court in Manhattan, the DOJ and Live Nation announced a settlement that would not force the company to split from Ticketmaster.

The settlement requires Live Nation to forgo some exclusive booking arrangements, allowing certain venues to choose which concert promoters to work with. Additionally, it caps ticketing service fees at 15 percent at those venues. The deal was rejected by 36 states that had joined the DOJ’s lawsuit last year, including Massachusetts. The trial resumed on Monday.

Rebecca Haw Allensworth, an antitrust scholar from Vanderbilt Law School and the Ropes & Gray Visiting Professor of Law at Harvard Law School, explained the litigation and its implications for ticket buyers. According to the government, Live Nation dominates three related markets: ticketing, major concert venues, and concert promotion.

In the ticketing market, Live Nation owns Ticketmaster, which is the primary platform for purchasing tickets to major concerts. The company also owns the vast majority of major concert venues, defined as venues larger than a theater or small venue but not quite a stadium. This vertical integration, as it is known in antitrust law, gives Live Nation significant control over the concert industry.

The DOJ argued that Live Nation’s dominance in these markets stifled competition. By controlling ticketing and venues, the company could charge exorbitant fees and restrict the ability of other promoters to compete fairly. This, in turn, led to higher ticket prices for consumers.

The settlement announced last week was seen as a compromise. While it does not force Live Nation to split from Ticketmaster, it does impose some restrictions on the company’s practices. By allowing venues to choose their promoters and capping ticketing fees, the settlement aims to increase competition and reduce ticket prices.

However, antitrust scholars like Allensworth view the settlement as a temporary fix. She described it as a “Band Aid” that does not address the root cause of the problem. The vertical integration of Live Nation and Ticketmaster remains unchanged, and the company still retains significant control over the ticketing and venue markets.

Allensworth explained that the DOJ’s original request for a breakup was based on the belief that Live Nation’s dominance in multiple markets created an unfair advantage. By separating the companies, the DOJ hoped to create a more level playing field for competitors. The settlement, in contrast, only addresses some of the anticompetitive practices without dismantling the vertical integration.

The rejection of the settlement by 36 states highlights the ongoing concerns about Live Nation’s practices. These states argue that the settlement does not go far enough in addressing the anticompetitive behavior and that a breakup is necessary to protect consumers and promote fair competition.

The trial resumed on Monday, with both sides presenting their arguments. The outcome of the case will likely have a significant impact on the future of the concert industry. If the DOJ wins, it could lead to a major shift in the industry, with Live Nation and Ticketmaster being forced to separate. This would potentially create more competition and lower ticket prices for consumers.

However, if the settlement stands, it could serve as a precedent for future antitrust cases. It would demonstrate that settlements can be an effective way to resolve disputes without necessarily dismantling companies. But critics argue that this approach may not fully address the anticompetitive issues at hand.

In the meantime, concertgoers will have to navigate the complexities of the current settlement. While some venues may see reduced ticket fees and increased competition, the overall impact on prices and accessibility remains uncertain. The case will continue to be closely watched by antitrust scholars, industry experts, and consumers alike, as the future of Live Nation and Ticketmaster is determined in the courtroom.