Live Nation, Ticketmaster face antitrust suit over claimed monopoly

Live Nation Entertainment and its Ticketmaster subsidiary must face antitrust claims from a putative class of consumers who accused the entertainment service conglomerate of monopolizing the concert ticketing market with inflated prices and fees.

On Friday, U.S., District Judge George Wu denied the companies' motion to drop the three-year-old case in Los Angeles on grounds the alleged harm was neither indirect nor speculative. The judge ruled these findings satisfied prongs of the antitrust standing inquiry and sufficiently alleged a redressable injury in the case.

"Plaintiffs assert the fairly straightforward theory that 'Defendants anticompetitively prevented competition in primary and secondary ticketing services, thereby immunizing Ticketmaster from price competition and allowing to charge inflated fees,'" Wu's order stated.

"Defendants suggest that because the market for primary ticketing is a 'rights market,' 'one would expect increased competition among primary ticketers to drive up-front payments to venues higher, amplifying [fees].' But this argument flies in the face of the study by the U.S. Government Accountability Office cited in plaintiffs' complaint, which concluded that 'markets that are not encumbered by Ticketmaster's monopoly over ticketing services demonstrate much lower prices for consumers.'"

Live Nation's counsel at Latham & Watkins LLP also challenged the consumers' claims related to alleged monopolistic contracts between the companies and artists, ticket brokers and venues, as well as theories related to monopoly leverage and a purported coercion of the resale ticket market.

Wu dismissed, without prejudice, claims related to the artist agreements due to lack of requisite detail to sufficiently plead those contracts violated antitrust law. However, the secondary ticketing market claims and conduct theories involving the venues and ticket brokers were allowed to move forward.

The consumer plaintiffs are led by Quinn Emanuel Urquhart & Sullivan LLP partner Adam B. Wolfson. Firm partner and co-counsel Kevin Y. Teruya, who made the successful opposition arguments, said in an email on Monday that they are unable to comment on the pending litigation.

Latham & Watkins partner Timothy L. O'Mara leads the defendant companies. He did not respond to an email or voice message by press deadline. A media spokesperson for Live Nation and Ticketmaster did not respond to emailed inquiries sent to each company's press inbox.

It is the second time the defendants' attempt to dismiss or pause the 2022 case failed. Last October, a 9th U.S. Circuit Court of Appeals panel affirmed Wu's order that denied the companies' motion to compel arbitration. The companies moved to dismiss the case months later. Skot Heckman et al. v. Live Nation Entertainment Inc. et al., 2:22-cv-00047 (C.D. Cal., filed Jan. 4, 2022).

In 2010, Ticketmaster - the largest ticketing company in the U.S. - became a wholly-owned subsidiary of Live Nation, one of the largest entertainment companies worldwide. According to the complaint, both companies abuse this power and limit competitors by "threatening" venues if they do not use Ticketmaster as their primary service provider for large events and major concerts.

Such activity, according to the plaintiffs, causes supracompetitive practices and an unfair dominance of the secondary ticketing market. For example, the plaintiffs argue Ticketmaster seeks conditional licenses that limit the number of primary tickets a consumer can purchase and forces the purchasers who want to resell those tickets to do so exclusively on Ticketmaster's platform.

This gives both companies complete control over the market for events at these venues, the complaint claims.

The consumers' case in Los Angeles is similar to a separate multi-state antitrust suit the Department of Justice and 30 state attorneys general filed against Live Nation and Ticketmaster last year in New York. The government lawsuit, which asks to separate the companies, accuses them of unlawfully overcharging consumers and exercising monopoly power that limits the entry and expansion of competing services in the market.

The companies allegedly force artists to agree with Live Nation's concert-promotion services in order to perform at the larger venues, according to the complaint.

Live Nation's bid to dismiss the government's case was also unsuccessful. U.S. District Judge Arun Subramanian denied a dismissal motion in March. U.S. v. Live Nation Entertainment et. al., 1:24-cv-03973 (S.D. N.Y., filed May 23, 2024).