Controversy around radius clauses attached to artists playing Lollapalooza in Chicago appears to be coming to a head. Chicago-based blogger Jim Derogatis posted today that Illinois Attorney General Lisa Madigan is investigating Lolla promoters C3 Presents on anti-trust concerns relating to radius clauses for artists performing at the fest.

Sources confirm to Billboard.biz that partners at Austin, Texas-based C3 Presents, which declined to comment for this story, had been subpoenaed in the investigation and were gathering information to present to the AG’s office. Derogatis reported that William Morris Endeavor Entertainment VP Marc Geiger confirmed that he was subpoenaed as well.

Radius clauses for artists based on time and distance are common in performance contracts, not only with headlining one-off concerts but also with fairs and festivals that invest millions in talent and production costs and seek to protect the market value of an act or collection of acts in a given marketplace. The C3 radius clause for Lollapalooza is generally six months before the festival and three months after, and extends for 300 miles outside Chicago. Local promoters and venues have complained in the past in Chicago and other cities with major festivals that restrictive radius clauses cut into the number of acts that can be booked by other talent buyers in the market.

But a source with knowledge of the Chicago/Lollapalooza situation says that as many as 50% of bands booked by C3 for Lollapalooza break the radius clause by playing Chicago within the confines of the radius without repercussions from C3, and as many as 90% play within the 300 miles within the specified time frame. One insider told Billboard.biz that C3 had never enforced the radius clause.

C3, which also produces the ACL Music Fest in Austin, is three years into a 10-year deal with the Chicago Parks District to promote and produce Lollapalooza in the city’s Grant Park. This year’s event is set for Aug. 6-8, with headliners Soundgarden, Green Day and Lady Gaga among its 100-plus acts. Last year’s fest grossed more than $14 million, according to Billboard Boxscore, third among all festivals.