Credit: Paolo V.
Ticketmaster and its parent company, Live Nation, face a lawsuit in the coming months against Taylor Swift fans for alleged “unlawful conduct” in ticket sales. The class-action lawsuit was filed in the Los Angeles Superior Court and includes lawyers for twenty-six plaintiffs who live in thirteen states. Swift fans claim that Ticketmaster functions as a monopoly by forcing attendees to exclusively use its platform to purchase and resell tickets. The lawsuit claims the lack of competition allows Ticketmaster to charge exorbitant prices for tickets, and alleges that this “anticompetitive behavior” violates antitrust laws. Swift fans involved in the lawsuit are currently seeking $2,500 for each violation of the Sherman Antitrust Act and urge lawmakers to take action against Ticketmaster by putting an end to its monopolistic practices.
The Sherman Antitrust Act
In 1890, the Sherman Antitrust Act was passed to prohibit companies from engaging in anticompetitive business practices. This was Congress’s first attempt to regulate interstate commerce while promoting fair competition. The Sherman Antitrust Act consists of three key sections aimed to prohibit the formation of trusts, monopolies, and cartels: Section 1 makes it illegal to engage in anti-competitive practices that restrain trade or commerce between states; Section 2 prohibits any person who monopolizes or attempts to monopolize trade or commerce amongst the states; and Section 3 prohibits any contract, conspiracy, or business interest that limits trade in the territory of United States and foreign nations. Since its enactment, the Sherman Antitrust Act and the Federal Trade Commission continue to govern major industries in the United States, including the oil, railroad, tech, entertainment, and ticketing industries.
Ticketmaster Monopolizes the Market by Engaging in Anti-competitive Behavior
In Cavaliers & Flash Seats LLC v. Ticketmaster, Ticketmaster brought suit in 2008 against the Cleveland Cavaliers, a professional basketball team, and Flash Seats LCC, a ticket sales agency, for violating Ticketmaster’s exclusive rights to sell tickets for the game. The Cavaliers and Flash Seats LLC argued that Ticketmaster intentionally engaged in anti-competitive behavior by dominating the ticketing sales market and violating the Sherman Antitrust Act. The Court ruled in favor of Ticketmaster and held, “Long-term exclusive ticketing contracts are standard in the ticketing industry, and Ticketmaster views exclusivity as its most important contractual right.”
Two years later, Ticketmaster merged with Live Nation Entertainment, creating a one-stop shop for performers to receive venue operating, events promotions, and ticket sales services. This merger led to Live Nation and Ticketmaster dominating seventy percent of the ticketing sales and live events markets. In United States v. Ticketmaster Entertainment, Inc., the United States District Court for the District of Columbia aimed to regulate this merger. The Court permitted Live Nation to merge with Ticketmaster, but prohibited the company from retaliating against concert venues for using other ticketing companies, threatening concert venues, or undertaking other specified actions against concert venues for ten years. In 2019, the Department of Justice’s Antitrust Division and Live Nation/Ticketmaster agreed to extend the 2010 judgment by five and half years. Although the court approved the modifications, Ticketmaster remains a primary ticketing platform for ticket buyers and continues to engage in anticompetitive behavior against other ticketing companies.
During Taylor Swift’s recent Eras Tour, Swift fans claim that Ticketmaster engaged in anti-competitive behavior by monopolizing the Eras Tour tickets and imposing higher prices in the presale, sale, and resale markets. As the primary place for fans to buy their tickets, Ticketmaster distributed presale codes to over 1.4 million “verified fans.” The verified fan program allowed fans to register their information and provide Ticketmaster with the date and location where they hoped to attend the concert. Shortly after, Ticketmaster unexpectedly canceled the public sale and claimed that the cancellation was due to its inability to meet the high volume of buyers. However, Swift fans allege that Ticketmaster engaged in price-fixing, fraud, and antitrust violations by providing codes to scalpers—a buyer who resells the ticket at a higher price—and not a hopeful fan. If allegations of colluding with scalpers are proven to be accurate, Ticketmaster would be in violation of Section 2 of the Sherman Antitrust Act.
Swift fans further allege that “Ticketmaster allowed bots and scalpers to remove tickets from a fan’s basket without being allowed adequate time to complete the sale.” In response, Ticketmaster claims to have addressed this issue and are actively finding ways to resolve it. On its website, Ticketmaster released a statement claiming that all tickets for the Eras Tour were sold to only verified buyers and reiterated that the ticket fiasco was an issue caused purely by high demand. Nevertheless, Ticketmaster’s merger with LiveNation has given it the power to monopolize most of the ticketing industry, ultimately violating Section 2 of the Sherman Antitrust Act.
Emerging Ticketing Companies Against Ticketmaster
As Ticketmaster continues to dominate the ticketing industry, success disasters—the overburdening of the system’s cloud capacity—have driven performers to rely on emerging ticket companies such as Eventix and Vividseats. Success disasters occur when customers lose access to all cloud-based assets related to product and service scaling events. In 2022, more than sixty percent of companies reported losses from cloud-based outages. Although outages are a common occurrence for companies offering products and service scaling events, long and unplanned outages have caused severe financial damage during and after the outages. Beyond the financial impact outages have on companies with cloud-based databases, customers begin to lose trust in the company itself. One Taylor Swift fan made forty-one attempts to purchase tickets to the Eras Tour. While attempting to purchase tickets, this fan faced repeated queue disconnections. Upon re-entering the queue, the fan discovered that tickets were priced at $1400 on Ticketmaster.
Credit: Mr. TinMD
In response to the chaos caused by the Eras Tour, legislators across the United States prepared bills aimed at increasing transparency and fairness in online ticket sales. For example, in California, SB 785, AB 8, and SB 829 provide comprehensive regulation of ticket sellers and require ticket sellers to be registered with the Secretary of State. More specifically, SB 785 imposes disclosure requirements on the advertisement of tickets for sale, requiring ticket resellers to disclose the face prices of the original tickets. Although some of the legislation was introduced prior to the Eras Tour, lawmakers have organized quickly in response to the “Swifties” that were outraged by the success disasters from Ticketmaster. In spirit with the Eras Tour, lawmakers in Washington proposed the “Ticket Sales Warranty Integrity, Fairness, and Transparency (TSWIFT) for Consumer Protection Act.” This current shift towards increased regulation has encouraged performers to utilize those smaller ticket companies, like Eventix and Vividseats, to distribute their tickets.
Founded in 2015, Eventix is a ticketing platform that believes in ease-of-use, innovation, and providing organizers with ownership of their data. This Netherland-based platform aims to combat the negative associations with service scaling events. Over the past few years, Eventix has announced its entry into the German, Spanish, and U.K. markets to provide full control and ownership of ticketing to the consumer. The company markets its complete transparency and allows the customer to control their data and tracking in hopes of fostering loyal ticket buyers. This aim for transparency in ticket sales has stretched beyond the U.S. ticketing markets. Similar to fellow European ticket buyers, U.S. ticket consumers have shifted from big names like Ticketmaster, and have utilized smaller companies, such as Vividseats to avoid scalpers that upcharge buyers who plan on attending the performances.
Founded in 2001, Vividseats is a Chicago-based company that provides tickets in North America. To further establish its transparency in the market, the Vividseats website offers revenue metrics of the company’s yearly income. For example, the company’s net income increased by fifty-nine percent between 2022 and 2023 to $38.3 million. Further, Vividseats has partnered with some of the biggest brands in the entertainment industry, including ESPN, Rolling Stone, and the Los Angeles Clippers. With this new shift towards more regulation and transparency for its consumers, regulations in the ticketing industry are paving the way for smaller ticketing companies to compete with household names like Ticketmaster.
Closing Remarks
As Swifties and other individuals disenfranchised by the ticketing industry continue to rally for proposed legislation to stop Ticketmaster’s monopoly, there is likely to be more proposed legislation to further regulate the ticketing industry. The “Ticket Sales Warranty Integrity, Fairness, and Transparency (TSWIFT) for Consumer Protection Act” is likely the first of many proposed pieces of legislation that will encourage competition within the ticketing industry to benefit consumers. With the current rise in consumer attention, policymakers will likely continue to advocate for a rise in emerging ticketing companies to enhance market competition and protect consumers from upcharges.
*The views expressed in this article do not represent the views of Santa Clara University.