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, artificially driving up ticket costs for concertgoers. The DOJ sought to break up the two companies, which merged in 2010, but last week, while a trial was underway in federal court in Manhattan, the DOJ and Live Nation announced a settlement that will not force the company to split from Ticketmaster.

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, concert venues, and touring artist management. In the ticketing market, if you attend a major concert, you’re most likely to go through Ticketmaster, which is owned by Live Nation. Live Nation also owns, according to the government, the vast majority of major concert venues, defined as venues larger than a theater or small venue but not quite a stadium.

The DOJ argued that Live Nation’s vertical integration—owning both ticketing and venues—allowed the company to control ticket prices and limit competition. This vertical integration, the government contended, stifled innovation and choice for concertgoers. The DOJ sought to break up Live Nation and Ticketmaster to restore competition in these markets.

However, the recent settlement between the DOJ and Live Nation does not force the companies to split. Instead, the deal requires Live Nation to forgo some exclusive booking arrangements, which will allow certain venues to choose which concert promoters to work with. The settlement also caps ticketing service fees at 15 percent at those venues. The settlement was rejected by 36 states that had joined the DOJ’s lawsuit last year, including Massachusetts. The trial resumed on Monday.

Allensworth described the settlement as a “Band Aid” solution. While it addresses some of the anticompetitive practices, it does not fully resolve the structural issues created by Live Nation’s vertical integration. “The real problem here is the ownership structure,” she explained. “By not breaking up the companies, we’re not addressing the root cause of the anticompetitive behavior.”

Allensworth noted that the DOJ’s original proposal to break up Live Nation and Ticketmaster was based on the belief that the companies’ combined control over ticketing and venues created a monopoly. The settlement, in contrast, only requires Live Nation to make limited changes to its business practices. This approach may not be sufficient to restore competition in the long term.

In the short term, the settlement could provide some relief for concertgoers. By allowing venues to choose their concert promoters and capping ticketing fees, it may reduce the artificial inflation of ticket prices. However, Allensworth warned that this may not be a permanent solution. “If Live Nation can still maintain its dominance in ticketing and venues, it will continue to leverage that power to stifle competition,” she said.

The rejection of the settlement by 36 states highlights the ongoing concerns about Live Nation’s anticompetitive practices. These states argue that the settlement does not go far enough in addressing the issues raised by the DOJ’s lawsuit. The trial will continue, and the outcome could have significant implications for the future of the concert industry and the regulation of vertical integration in the United States.

Allensworth emphasized the importance of antitrust enforcement in preventing monopolistic behavior. “The antitrust laws are there to protect consumers and foster competition,” she said. “In this case, the settlement falls short of achieving that goal.” As the trial continues, it remains to be seen whether Live Nation will be forced to make more substantial changes to its business practices or if the settlement will be upheld as a sufficient resolution to the antitrust concerns.