Ticketmaster will pay $10m (£7.3m/€8.1m) to avoid prosecution on US-based charges that its employees repeatedly accessed the computer systems of rival company CrowdSource, which was later acquired by Songkick.
The US Department of Justice (DOJ) said the three-year “deferred prosecution agreement” would resolve a case comprising five counts of “computer intrusion and fraud offences”.
During a hearing in New York’s Brooklyn federal court last week, prosecutors said Ticketmaster employees used stolen passwords to access computers belonging to its rival to obtain confidential business information from August 2013 to December 2015.
They added: “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”
Ticketmaster said: “We are pleased that this matter is now resolved.” It added that the misconduct had taken place in 2017 and involved two employees, both of whom had since been sacked.
The two individuals involved in the misconduct were Stephen Mead, who worked for CrowdSurge between 2010 and 2012 prior to its 2015 acquisition by Songkick, and Zeeshan Zaidi, the former head of Ticketmaster’s artist services division. In 2019, Zaidi entered a guilty plea in a related case to conspiring to commit computer intrusions and wire fraud.
Ticketmaster said: “Their actions violated our corporate policies and were inconsistent with our values.”
The deferred prosecution agreement also means Ticketmaster has to “maintain a compliance and ethics programme” designed to prevent and detect violations of the Computer Fraud and Abuse Act and other applicable laws.
Ticketmaster also has to report annually to the US Attorney’s Office during the three-year term of the agreement regarding these compliance measures.
If it breaches the agreement, it will be “subject to prosecution for the charges in the criminal information that was filed” in the current case.
Songkick, which merged with CrowdSurge five years ago, sued Ticketmaster and Live Nation in 2015, initially accusing the entertainment giant of anticompetitive acts. Later it filed an amended complaint accusing the former CrowdSurge employee, who went on to work for Ticketmaster, of hacking trade secrets.
Songkick lost a number of pretrial motions, but was able to proceed with its legal proceedings despite it effectively ceasing operations in 2017. The long-running legal battle concluded in January 2018 with Live Nation buying its rival’s assets and agreeing an out-of-court settlement.