Shares of Live Nation Entertainment (LYV) plunged 7.6 percent on Tuesday after the Wall Street Journal reported that the Department of Justice (DOJ) is planning an antitrust lawsuit against the company for allegedly leveraging its market dominance to undermine competition. The decline marks Tuesday’s worst performer in the S&P 500.
Live Nation, Ticketmaster’s parent company, did not immediately comment on the pending litigation but just last month the head of corporate affairs, Dan Wall, published an essay to explain its ticketing price process in response to allegations that it benefited from having monopoly power in the industry following its merger. Live Nation bills itself as the “largest live entertainment company in the world.”
The DOJ approved the merger between Live Nation and Ticketmaster in 2010, a move that allowed it to control more than 70 percent of the live event and ticketing service market. The DOJ believed that the move would promote competition and lower ticket sales, given the conditions imposed on the company that were meant to preserve and promote ticketing competition. However, critics had long argued the merger would only drive up ticket costs.
In 2020, the company was accused of pressuring concert venues to use its ticketing software. So, the federal government issued a legal order that prohibited the behavior and imposed penalties for violating any conditions of the merger’s final agreement. The 10-year legal order was extended in 2020, a move by the DOJ that gave it more power to regulate the company’s dominance in the market.
“Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010. Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer,” according to a DOJ press release.
Widespread criticism of the ticket giant reached a boiling point in 2022 when millions of Taylor Swift fans were not able to buy pre-sale tickets to the pop star’s highly-anticipated Eras tour due to service delays and website crashes. One fan even launched a class-action lawsuit over the botched rollout and accused Live Nation of being a monopoly that knowingly misled fans and unfairly treated customers. That lawsuit was eventually dropped.
Live Nation eventually apologized to fans and blamed the fiasco on “unprecedented traffic” and a “staggering number of bot attacks.” But the high-profile ticketing debacle reignited debate over the company’s monopoly power. In January 2023, the Senate Judiciary Committee held a hearing to examine the company’s dominance in the market. Senator Amy Klobuchar (D-Minn.) and others suggested that regulators consider breaking up the company, according to a letter to Attorney General Merrick Garland.
”An investigation alone does nothing for the stakeholders already harmed by Live Nation’s market dominance and seemingly ongoing anticompetitive behavior … This may be the only way to truly protect consumers, artists, and venue operators and to restore competition in the ticketing market,” the letter states.
Live Nation enjoyed an increase in concert demand in the years following the COVID-19 pandemic. Concert attendance was up 20 percent in fiscal year 2023 compared to the previous year. According to its latest earnings report, the company also experienced a 36 percent revenue boost to $22.7 billion in that same period.
Live Nation also recently reported a strong start to 2024 with sales up 6 percent with 57 million tickets sold for shows this year so far.
