Ticketmaster has been under scrutiny for quite some time regarding their ticketing practices, but things came to a head this week as a result of the tumultuous presale for Taylor Swift's 2023 tour. The ticket seller's parent company, Live Nation Entertainment, is reportedly being investigated.
According to a report by the The New York Times, the Justice Department has opened an antitrust investigation on Live Nation Entertainment, the company that merged with Ticketmaster in 2010 and serves as its parent company.
Ticketmaster's Verified Fan presale for Taylor Swift's tour occurred earlier this week on Tuesday (Nov. 15). Apparently, 3.5 million fans had signed up, and 1.5 million were given codes, meaning the other 2 million were put on a waitlist. When the sale began, there were 3.5 million users aboard the system, causing the servers to crash due to the volume. Thousands of fans who were in the process of securing tickets lost them, and others were unable to purchase any at all, despite waiting hours — even days — in the company's virtual waiting room.
Even when tickets for high sought after events such as Swift's tour are available, they are more than likely priced exorbitantly due to the use of dynamic pricing, in which Ticketmaster charges fluctuating prices based on supply and demand for a particular show. Some seats for the pop star's tour were selling for as high as $20,000, as noted by PopCrush.
Faiz Shakir, Executive Director of More Perfect Union, blames the high prices squarely on Ticketmaster.
"Live Nation-Ticketmaster has been unabashedly raising prices and fees, giving fans no other choice but to give them their hard-earned money to attend events," Shakir said in a statement. "This is an opportunity for the Department of Justice to demonstrate that government is working to protect our best interests by reversing the failed merger of Live Nation-Ticketmaster after a decade of scamming Americans."
However, according to several sources who spoke with the NYT, the Justice Department's investigation was opened prior to this week's Swift conundrum. So, let's break things down a bit.
What is an antitrust investigation?
Well, to start, we should define what an antitrust is. Antitrust laws are defined by Investopedia as "regulations that encourage competition by limiting the market power of any particular firm," meaning they prevent companies from forming monopolies, and they force companies that do become monopolies to break up.
Therefore, this investigation will determine whether or not Live Nation Entertainment has violated antitrust laws by turning Ticketmaster, and itself, into a monopoly. Since the majority of concert tickets are initially only available through Ticketmaster, fans have to resort to secondary market companies and resale vendors to buy tickets if they're unsuccessful on Ticketmaster.
How is it being conducted?
There isn't a ton of information about the specifics of the investigation because it's a sensitive matter, but according to The New York Times' sources, the Justice Department's antitrust staff has been speaking with live music venues and other ticketing companies over the last few months about Live Nation Entertainment's business methods.
What has the Department found so far?
As previously stated, Live Nation and Ticketmaster merged in 2010. The Justice Department approved of the merger back then, but there were stipulations involved, one of which prohibited the company from threatening to not hold shows at music venues for working with other ticket vendors. The settlement condition was only set to last for 10 years, meaning it expired in 2020, but in 2019 the Department found that Live Nation had violated these terms, so they were redefined and extended to 2025.
While there are not a ton of details about the investigation that are public at this time, according to the New York Times it will look at whether the company has abused its power over the entertainment industry as well as if it has a monopoly over the music events ticketing industry.
