The US Department of Justice (DOJ) is set to file a competition lawsuit against entertainment giant Live Nation over its “monopoly” of the US entertainment market.
The antitrust suit could be filed as soon as today (Thursday) and could see entertainment giant Live Nation Entertainment forced to split from subsidiary Ticketmaster.
In a story first published by the Washington Post, the federal government will be joined in its legal challenge by numerous state attorneys general.
The DOJ case is believed to be centred around Ticketmaster’s use of exclusive ticketing contracts when signing up venues for its ticketing services. According to critics of Live Nation’s business model, this squeezes out competitors, weakens customer choice and helps to push up prices.
Live Nation’s share price sank in after hours trade on Wednesday following media reports. Shares were initially down as much as 9.3% to $92, although they later recovered some ground.
Consent decree breach
Live Nation Entertainment was created by the merger in 2010 of events promoter Live Nation and ticket sales leader Ticketmaster. At the time, the DOJ approved the deal despite concerns that it would create a giant capable of dominating the live entertainment industry.
The merger was pursuant to a consent decree which allowed Live Nation and Ticketmaster to combine but required them to follow a range of conditions in order to keep consumer prices in check by preserving competition in the industry. One condition of the merger was that Ticketmaster and Live Nation “will be expressly prohibited from retaliating against any venue that considers or works with another primary ticketing service, which should encourage experimentation and innovation in the industry”. Reports suggest the DOJ has found the group to be in breach of this important tenet of the 2010 agreement. It is believed the DOJ investigation began in the summer of 2022.
Share this