Songkick Alleges Live Nation & Ticketmaster Hacked Trade Secrets in New Court Filing

Songkick's long-running lawsuit against Live Nation and Ticketmaster alleging antitrust violations, anticompetitive behavior and intentional interference has taken another turn. In an amended complaint filed in U.S. District Court in California, Songkick is now alleging that a former CrowdSurge executive and current Ticketmaster employee, Stephen Mead, hacked into CrowdSurge's protected computers and acquired trade secrets and confidential information, which he then funneled to Ticketmaster in order to improve the ticketing giant's Artist Services division. (Songkick acquired CrowdSurge in June 2015; this lawsuit was initially filed in December 2015.)

In the new filing, Songkick claims Mead resigned from CrowdSurge in July 2012 and walked out with as many as 85,000 documents, including "a suite of proprietary service offerings; financial information, such as ticket sales, merchandise revenues, quarterly profitability, and forecasts of various kinds; cost and pricing data; customer information; and other non-public information of economic value."

Less than a year after leaving CrowdSurge and signing a non-disclosure separation agreement, the complaint reads, Mead joined Ticketmaster-owned TicketWeb, then joined Ticketmaster's artist services division, where he used that data to create "a clone of CrowdSurge called Ticketmaster OnTour."

But Songkick says the data breach didn't end there; the filing goes on to say that Ticketmaster SVP Zeeshan Zaidi, who runs the artist dervices division, and others within the company pushed Mead to "use his knowledge of CrowdSurge’s internal systems to improperly access those systems for purposes of monitoring CrowdSurge’s potential and actual artist-clients, staying abreast of what CrowdSurge was doing and, ultimately, to 'cut [CrowdSurge] off at the knees.'"

Songkick further alleges that the information Mead obtained was then presented to the Live Nation hierarchy, including Live Nation CEO Michael Rapino and Ticketmaster president of North America Jared Smith. In emails obtained by Songkick during the discovery process of the lawsuit, the amended complaint alleges the existence of emails between Mead, Zaidi and others containing passwords and usernames for CrowdSurge's system, as well as explicit discussion about "snooping around" and taking screenshots of CrowdSurge's proprietary data, with the expressed goal of undermining it as a competitor.

According to the complaint, the hacking of CrowdSurge's system continued in some form from November 2013 through 2015.

Live Nation, for its part, fired back forcefully in a statement provided to Billboard:

"In late 2015, Songkick elected to file a baseless antitrust lawsuit against Ticketmaster," the statement reads. "Since then, the case has gone poorly for Songkick. It sought a preliminary injunction and lost, with the Court concluding that Songkick’s complaint 'failed to show virtually any likelihood of success on the merits.' And the Court granted in full Defendants’ motion to dismiss a significant swath of Songkick’s antitrust claims concluding that 'there is no plausible argument' supporting the baseless position Songkick adopted.

"In the face of those adverse rulings," the statement continues, "Songkick has been forced to conjure up a new set of dubious arguments and theories, resulting in the amended complaint they recently filed. Songkick’s amended complaint is based on the alleged misappropriation of information that Songkick did not even try to keep secret, in some cases could not have kept secret, and in some cases shared with artist managers that work for Live Nation. The claims have no legal merit and Live Nation and Ticketmaster will continue to vigorously defend this case."

U.S. District Judge Dale S. Fischer granted Songkick's petition to file its amended complaint today (Feb. 15), which gives Live Nation and Ticketmaster 30 days in which to formally respond.