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The US Department of Justice pins Live Nation as potential monopoly

When the Justice Department allowed a merger of the music industry’s two most dominate companies — Live Nation and Ticketmaster — critics feared the worst.

A merger between the world’s biggest concert promoter and live entertainment’s leading ticket provider would, essentially, “create an industry monolith, one capable of crippling competitors in the ticketing business,” according to the New York Times.

The merger was granted back in 2010, with federal officials reassuring skeptics that the terms of the legal settlement would block monopolistic behavior by Live Nation and ultimately bolster market competition.

Eight years later, and the newer, more bloated Live Nation has a hand in nearly every aspect of the live concert world. Not only that, according several complaints filed to the DOJ, the company has become the biggest bully on the block. The most damning evidence came from Live Nation’s biggest competitor, AEG, that claims emails between venue managers and Live Nation representatives suggest venues were bypassed by Live Nation tours after adopting AEG’s ticketing program, AXS.

Live Nation dismissed AEG’s complaints as tactical mischaracterizations: “You have a disgruntled competitor that is trying to explain their loss around the boogeyman that there were threats made that nobody can document,” said Daniel M. Wall, Live Nation’s antitrust lawyer.

“Now Department of Justice officials are looking into serious accusations about Live Nation’s behavior in the marketplace,” a New York Times article reports. “They have been reviewing complaints that Live Nation, which manages 500 artists, including U2 and Miley Cyrus, has used its control over concert tours to pressure venues into contracting with its subsidiary, Ticketmaster.”

The report continues, “The company’s chief competitor, AEG, has told the officials that venues it manages that serve Atlanta; Las Vegas; Minneapolis; Salt Lake City; Louisville; and Oakland were told they would lose valuable shows if Ticketmaster was not used as a vendor, a possible violation of antitrust law.”

Other DOJ complaints are investigating possible Live Nation threats aimed at venues in Austin and Boston.

The live music business has historically been a collaborative effort, with multiple parties coming together to put on a show, including promoters, talent agents and managers, venues, and ticketing companies. But Live Nation now runs all of them.

Worldwide, it operates more than 200 venues; last year, it promoted upwards of 30,000 shows and sold 500 million tickets; and, since the merger, it has acquired Lollapalooza and Bonnaroo, as well as gobbling up smaller promotional and ticketing companies from all over the US to Europe.

With the help of Ticketmaster, the behemoth company has engorged the competition: “Ticket prices are at record highs. Service fees are far from reduced. And Ticketmaster, part of the Live Nation empire, still tickets 80 of the top 100 arenas in the country. No other company has more than a handful.”

Ticketmaster president, Jared Smith, responded to the NYT article, defending the legality of its practices,

The New York Times article suggests that any benefits of being a vertically integrated company are, in and of themselves, anticompetitive   They insinuate that we “condition” content. That we “retaliate” when Ticketmaster is not selected as a venue’s ticketing partner. In short, they say we have stifled competition.

The reality is that none of these things are true. It is absolutely against Live Nation and Ticketmaster policy to threaten venues that they won’t get any Live Nation shows if they don’t use Ticketmaster. We also do not re-route content as retaliation for a lost ticketing deal. Live Nation is the most artist-focused company in the world, and misusing our relationship with artists to “settle scores” with venues would be both bad business and counter to our core beliefs.

No official statement has been released from Live Nation’s CEO, Michael Rapino. The company has just settled a $110 million lawsuit with Songkick over rights to ticket sales.

H/T: Consequence of Sound |Via: New York Times