The Department of Justice’s Antitrust Division is asking a Federal Court to modify a previous 2019 antitrust judgement in United States v. Ticketmaster Entertainment, Inc., et al., Case No. 1:10-cv-00139-RMC (July 30, 2010)(the “2010 Final Judgement”) to modify and clarify the order to end what the Justice Department charges are recurrent and continuing violations of the 2010 Final Judgment by Live Nation. One of two high profile antitrust enforcement actions impacting the music industry taken by the Justice Department in the same month, the action against Ticketmaster is characterized by the Justice Department as “the most significant enforcement action of an existing antitrust decree by the Department in 20 years” seeks to modify the 2010 Final Judgement so ticket holders and others will get the full benefit of the 2010 Final Judgement.
The 2010 Final Judgment resulted from antitrust litigation over the then proposed merger between Live Nation and Ticketmaster. Headquartered in Beverly Hills, California, Live Nation claims to be the largest live entertainment company in the world, active in three principal segments: concert promotion, ticketing services, and sponsorship & advertising. In 2018, Live Nation’s revenues were approximately $10.8 billion. Ticketmaster is a wholly-owned subsidiary of Live Nation following their merger in 2010. It claims to be the world’s leading live entertainment ticketing sales and entertainment company. In 2018, Ticketmaster’s revenues were approximately $1.5 billion.
The 2010 Final Judgement allowed Live Nation to merge with Ticketmaster subject to its compliance with certain conditions intended to prevent the merged operations from using their market power to control the concert and ticket marketplace such as prohibiting the merged company from retaliating against concert venues for using another ticketing company, threatening concert venues, or undertaking other specified actions against concert venues for ten years. While these and other conditions in the 2010 Final Judgement were supposed to prevent Live Nation from using its market dominance to unfairly control the market for tickets and ticket sales to the detriment of ticket purchasers, venues, artists and others, the Justice Department now charges Live Nation with recurrently repeatedly and over the course of several years violating the 2010 Final Judgement by retaliating against venues for using other ticketing agencies and other improper conduct in violation of the 2010 Final Judgment.
As part of a pre-agreed arrangement with Live Nation to resolve the compliance issues, the Justice Department on December 19 filed a motion in the U.S. District Court for the District of Columbia to reopen the docket in the underlying action, a necessary step towards filing the petition to clarify and extend the 2010 Final Judgment for an additional five and a half years beyond its scheduled expiration date. According to the Justice Department, once the court approves the petition for leave to amend the 2010 Final Judgement, the Justice Department intends to file a petition asking the Court to modify the 2010 Final Judgment to order Live Nation to stop violating the 2010 Final Order and clarify its responsibilities going forward by among other things, extending the term of the Final Judgment by five and a half years, to allow concert venues and American consumers to get the benefit of the relief the Department bargained for in the original settlement and impose other conditions to help deter additional violations and allow for easier detection and enforcement if future violations occur. The proposed additions will include providing:
- Live Nation may not threaten to withhold concerts from a venue if the venue chooses a ticketer other than Ticketmaster;
- A threat by Live Nation to withhold any concerts because a venue chooses another ticketer is a violation of the Final Judgment;
- Withholding any concerts in response to a venue choosing a ticketer other than Ticketmaster is a violation by Live Nation of the Final Judgment;
- The Antitrust Division will appoint an independent monitor to investigate and report on Live Nation’s compliance with the Final Judgment;
- Live Nation will appoint an internal antitrust compliance officer and conduct regular internal training to ensure its employees fully comply with the Final Judgment;
- Live Nation will provide notice to current or potential venue customers of its ticketing services of the clarified and extended Final Judgment; and
- Live Nation is subject to an automatic penalty of $1,000,000 for each violation of the Final Judgment.
- Live Nation will pay costs and fees for the Department’s investigation and enforcement.
The Justice Department’s action against Ticketmaster follows its intervention earlier in December in an antitrust lawsuit in which the mega performer rights organization Global Music Rights, LLC (“GMR”) and Radio Music License Committee, Inc. each accuse each other of operating an illegal cartel in violation of the Sherman Act in their respective actions in negotiating the bundled sale and purchase of licenses to play music over the radio airwaves.
Global Music Rights, LLC (“GMO” is a performing rights organization (“PRO”) that aggregates the performing rights of various songwriters and markets and sells performing rights to their works on a bundled basis to radio stations and others. Meanwhile, Radio Music License Committee, Inc.is an entity that aggregates and negotiates on behalf of radio stations and other license buyers .
On December 5, 2019, the Justice Department intervened in the Global Music Rights, LLC v. Radio Music License Committee, Inc., et al.:litigation by filing a Statement of Interest of the United States (12/05/2019)., where FMR and RML each accuses the other of acting as an illegal cartel and restraining trade in violation of federal antitrust law. Title I of the Sherman Act prohibits restraints and conspiracies to restrain trade or commerce in the United States. In its Statement, the Justice Department sides with FRM in arguing that RML improperly interprets the Sherman Act as only prohibiting sellers, and not buyers, from conspiring or entering into agreements to fix prices or engage in other restraints on trade as well as rejects as incorrect RML’s claim that FMR must prove RML intended to violate the Sherman Act and that the restraint was “unreasonable.” In expressing its opposition to these interpretations by RML, the Justice Department argues in its Statement of Interest that the Sherman Act applies equally to agreements among buyers and agreements among sellers to restrain trade and further, that a plaintiff establishes a prima facia price fixing claim under Title I of the Sherman Act simply by pleading that the defendant was a party to an agreement between two or more competitors to fix prices regardless of the intent of the parties or the unreasonableness of the agreement and its effect on prices or other commerce.
Aside from their implications for music lovers and artists, these two recent antitrust actions reflect the increasing antitrust enforcement emphasis of the Justice Department over the past year and discuss principles and issues relevant to a broad range of industries and circumstances including particularly aggressive enforcement against agreements no to solicit or hire and other market control agreements among competitors . Businesses of all types should take note of these developments and stay tuned for developments that could impact on their industries or practices.
We hope this update is helpful. For more information about this or other labor and employment developments, please contact the author Cynthia Marcotte Stamer via e-mail or via telephone at (214) 452 -8297.
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About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications focusing on internal controls and other performance. risk and compliance and operations management.
Scribe for the ABA JCEB Annual Agency Meeting with OCR, Vice Chair of the ABA International Section Life Sciences Committee, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and the ABA RPTE Employee Benefits & Other Compensation Group, Ms. Stamer’s work throughout her 30 plus year career has focused heavily on working with health care, employee benefit, insurance and financial services, business, trade and professional associations and groups, and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.
Author of leading works on a multitude of governance, internal controls, workforce and performance management and a host of other related compliance, risk management and regulatory and governmental enforcement and policy concerns, her work includes risk management and compliance counseling and audits, event investigation and redress, representation before regulatory and other bodies; statutory, regulatory and policy advocacy and other assistance to business and government clients. For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
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