US District Judge George Wu of Los Angeles questioned the fairness of this approach, and also criticised how Live Nation imposed new terms of arbitration on ticket-buyers without telling consumers, according to a report from Reuters.
The article added that businesses would prefer private arbitration, as disputes can often drag on for years in court, proving costly on both sides. Arbitration can also hinder others from forming class actions.
Taylor Swift fans filed an antitrust lawsuit in December against Live Nation, after the company and Ticketmaster faced scrutiny for the issues experienced during the pre-sale for the singer’s Eras Tour in the US.
Ticketmaster said the high level of demand for tickets, mixed with a “staggering” number of bot attacks, caused the issues.
The ruling means that there is still the ability of plaintiffs to seek class-action status. The entertainment company can appeal the order to the San Francisco-based 9th US Circuit Court of Appeals. It can try to pause the litigation in the district court from moving forward.
Live Nation wanted to force consumers into arbitration at New Era ADR, a platform that launched in 2021 and offered a new mass arbitration process. This means that the neutral overseeing the matter could group together cases, and make a ruling that would apply to all and additional disputes.
Wu questioned the “unchecked power” of the arbitrator to group cases together. He added that limitations on evidence gathering were “wholly inadequate for claimants to even begin to prove their case”.
Wu wrote: “Because defendants are often in effect the only ticketing game in town, would-be concert goers are forced to accept defendants’ [terms of use] in full, or else forgo the opportunity to attend events altogether.”
Rich Lee, New Era chief executive, said in a statement to Reuters that a colleague of Wu on the bench in a different case said Live Nation’s designation of New Era “valid” and “enforceable”.
He added that Wu’s ruling offered a “useful roadmap to improve our mass arbitration protocols”.
Warren Postman, an attorney for the plaintiffs, said: “Ticketmaster tried to force its customers into a group arbitration process that stacked the deck repeatedly in its favour.”