Songkick Sues Live Nation and Ticketmaster for Antitrust
Songkick, fresh off two major presale projects with Adele (one that went smoothly and one that, well, didn't), is suing Live Nation and Ticketmaster, the world's largest concert promotions and…
Songkick, fresh off two major presale projects with Adele (one that went smoothly and one that, well, didn’t), is suing Live Nation and Ticketmaster, the world’s largest concert promotions and ticketing companies, respectively, for antitrust violations, anticompetitive behavior and intentional interference.
Songkick alleges in its 68-page complaint, filed today in U.S. District Court of Central California, that Live Nation and Ticketmaster undertook a concerted effort to hamper its business and that the two companies employed their vastly dominant positions in the live event and ticketing industries to do so. (The complaint cites “industry data” that shows 70 percent of ticket sales come through Ticketmaster.com, and states that Live Nation “controls more than 60 percent of the concert promotion services market and it promoted 22 of the top 25 global tours in 2014.” It also claims, for instance, that Ticketmaster’s outsize profitability allows Live Nation to make loss-leading offers to potential clients, freezing out competitors.)
A large portion of Songkick’s complaint hinges on a “fan club policy” instituted by Ticketmaster. It’s been a long-established practice for artists to receive an allotment of tickets with which to do as they please — namely, sell them. Songkick’s business model is centered around these presale bundles, which the company helps artists to package, promote, sell and gain insight from for their artist clients. The complaint maintains that, before Songkick’s merger with Crowdsurge, Ticketmaster told the latter company’s clients that they could only sell their presale allotments to a fan club, and that that club must adhere to a set of criteria in order for that artist to receive their presale disbursal of tickets. Songkick/Crowdsurge agreed to these rules, the complaint says, because it did not want to run afoul of Ticketmaster and parent company Live Nation’s dominant market position. Songkick/Crowdsurge maintain the criteria around these fan clubs were purposefully capricious, allowing Ticketmaster to rescind, or threaten to rescind, presale allotments. “No pretense was too absurd” for Ticketmaster to claim a fan club did not meet its criteria.
The complaint mentions Live Nation director and CEO Michael Rapino thirteen times, concluding that the executive “personally and repeatedly engaged in the anticompetitive acts giving rise to this complaint.”
One passage alleges a specific and dramatic instance of abuse by Live Nation and Ticketmaster:
Defendants threatened yet another artist (whose identity will be disclosed once a protective order is in place) that Defendants would not market the artist’s tour and would moreover not permit the artist to use Paperless Ticketing (a technology designed to inhibit scalping) on any general sale tickets for the artist’s tour if the artist opted to engage Songkick rather than Ticketmaster for artist presale ticketing services. If carried out, such threats to withhold marketing would clearly damage Defendants, because they would result in overall lower ticket sales for Ticketmaster’s concert venue ticketing business, and would result in lower revenues for Live Nation’s promotion business and Ticketmaster’s venue clients. In a competitive market, such threats would be economically irrational. Ticketmaster’s aggression therefore demonstrates the lengths to which Defendants were prepared to go in order to protect Ticketmaster’s market power, including damaging themselves and their clients in order to preserve that power. In this specific instance, the threat worked. As the artist’s management explained to Songkick: “[T]he Ticketmaster bullying is out of control and we’re not going to be able to do all tour pre-sales off-platform. They are just sticking it to us too hard.”
Live Nation and Ticketmaster were required to submit to a consent decree in 2010 in order to secure approval of a merger between the two companies. That consent decree did not cover presale ticketing. Stipulations of the decree included Ticketmaster licensing its platform to competitors like AEG and divesting itself of Paciolan, a company which allowed venues to “host their own primary ticketing service on their websites.” The stipulations were intended to ensure that at least two competitors would be present in the market. Additionally, the merged companies would not “be allowed to require that a client accept Live Nation as a promoter in order to access Ticketmaster’s primary ticketing services, or vice versa.” The Justice Department characterized the decree as using a “scalpel rather than a sledgehammer.”
Live Nation and Ticketmaster did not respond to a request for comment.