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| Citing Violations, U.S. to Toughen Live Nation Accord on Ticketing | Citing Violations, U.S. to Toughen Live Nation Accord on Ticketing |
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| The Justice Department, in what it described as its strongest enforcement of an antitrust agreement in 20 years, said Thursday that it and Live Nation Entertainment have agreed to amend and extend the regulatory decree that allowed the giant concert company to merge with Ticketmaster nearly a decade ago. | The Justice Department, in what it described as its strongest enforcement of an antitrust agreement in 20 years, said Thursday that it and Live Nation Entertainment have agreed to amend and extend the regulatory decree that allowed the giant concert company to merge with Ticketmaster nearly a decade ago. |
| Justice officials said the settlement came after the department’s investigation found that Live Nation had repeatedly violated the existing agreement. The investigation focused on complaints from competitors that Live Nation has been using its control over the concert touring business to pressure music venues into signing contracts with its Ticketmaster subsidiary. | Justice officials said the settlement came after the department’s investigation found that Live Nation had repeatedly violated the existing agreement. The investigation focused on complaints from competitors that Live Nation has been using its control over the concert touring business to pressure music venues into signing contracts with its Ticketmaster subsidiary. |
| Such behavior, the Justice officials said, violated the terms of the consent decree that the government imposed as a condition of the merger in 2010 — a deal that created a colossus in the live entertainment business and has long been criticized for giving the company too much power. | Such behavior, the Justice officials said, violated the terms of the consent decree that the government imposed as a condition of the merger in 2010 — a deal that created a colossus in the live entertainment business and has long been criticized for giving the company too much power. |
| Under a proposed amended agreement that the government filed in federal court in Washington on Thursday, the decree, which was set to expire in July, would be extended to the end of 2025. Live Nation would also reimburse the Justice Department for its costs in enforcing the regulations. | Under a proposed amended agreement that the government filed in federal court in Washington on Thursday, the decree, which was set to expire in July, would be extended to the end of 2025. Live Nation would also reimburse the Justice Department for its costs in enforcing the regulations. |
| “Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010,” Makan Delrahim, the assistant attorney general who leads the Justice Department’s antitrust division, said. “Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer.” | |
| In its statement, Live Nation said: “We have reached an agreement in principle with the Department of Justice to extend and clarify the consent decree. We believe this is the best outcome for our business, clients and shareholders as we turn our focus to 2020 initiatives.” | In its statement, Live Nation said: “We have reached an agreement in principle with the Department of Justice to extend and clarify the consent decree. We believe this is the best outcome for our business, clients and shareholders as we turn our focus to 2020 initiatives.” |
| The adjusted decree would also clarify one of its most contested provisions — how Live Nation should conduct itself in the marketplace when it is selling its ticketing services and deciding where its artists should tour. | The adjusted decree would also clarify one of its most contested provisions — how Live Nation should conduct itself in the marketplace when it is selling its ticketing services and deciding where its artists should tour. |
| Under the existing agreement, Live Nation is forbidden from using the might of its concert-promotion division — which puts on tours by stars like Beyoncé and U2 — to coerce venues into signing exclusive deals to use Ticketmaster, which holds the contracts at roughly 80 percent of major music venues. | Under the existing agreement, Live Nation is forbidden from using the might of its concert-promotion division — which puts on tours by stars like Beyoncé and U2 — to coerce venues into signing exclusive deals to use Ticketmaster, which holds the contracts at roughly 80 percent of major music venues. |
| But the decree also allowed the company to “bundle” its services and gave Live Nation the right to exercise “its own business judgment” in making deals — terms that some antitrust experts believe made the decree ambiguous and difficult to enforce. | But the decree also allowed the company to “bundle” its services and gave Live Nation the right to exercise “its own business judgment” in making deals — terms that some antitrust experts believe made the decree ambiguous and difficult to enforce. |
| The revised decree would be designed to make clearer the restriction that Live Nation is not allowed to threaten venues in any way, and may not retaliate against venues that decide to use a system other than Ticketmaster. | The revised decree would be designed to make clearer the restriction that Live Nation is not allowed to threaten venues in any way, and may not retaliate against venues that decide to use a system other than Ticketmaster. |
| The Justice Department said it would appoint an independent monitor to investigate and report on Live Nation’s activities, and the company agreed to appoint an internal antitrust compliance officer. In the future, Live Nation will pay an “automatic penalty” of $1 million for each violation, the government said. | The Justice Department said it would appoint an independent monitor to investigate and report on Live Nation’s activities, and the company agreed to appoint an internal antitrust compliance officer. In the future, Live Nation will pay an “automatic penalty” of $1 million for each violation, the government said. |
| Live Nation has long denied violating the decree, saying that it had not threatened venues and faces a vigorous field of competition in ticketing. It did not admit to any wrongdoing as part of the agreement with the government. | Live Nation has long denied violating the decree, saying that it had not threatened venues and faces a vigorous field of competition in ticketing. It did not admit to any wrongdoing as part of the agreement with the government. |
| But competitors had complained to the Justice Department about several incidents over the years in Louisville, Ky.; Oakland, Calif.; Los Angeles, and other cities, where they said Live Nation had used its power over concert tours by major stars to strong-arm venues into using Ticketmaster. | But competitors had complained to the Justice Department about several incidents over the years in Louisville, Ky.; Oakland, Calif.; Los Angeles, and other cities, where they said Live Nation had used its power over concert tours by major stars to strong-arm venues into using Ticketmaster. |
| In the incident in Louisville, in 2014, managers of the KFC Yum! Center, a 22,000-seat arena, were considering replacing Ticketmaster with a system run by Live Nation’s biggest rival, AEG. But officials at AEG told The New York Times last year that they had received a warning from a Live Nation executive, saying the Louisville arena was likely to lose concerts if it dropped Ticketmaster. AEG said it had reported this to Justice investigators. | In the incident in Louisville, in 2014, managers of the KFC Yum! Center, a 22,000-seat arena, were considering replacing Ticketmaster with a system run by Live Nation’s biggest rival, AEG. But officials at AEG told The New York Times last year that they had received a warning from a Live Nation executive, saying the Louisville arena was likely to lose concerts if it dropped Ticketmaster. AEG said it had reported this to Justice investigators. |
| Live Nation disputed the account and supplied data showing that since 2012, the number of tours it has sent to the KFC Yum! Center has increased. | Live Nation disputed the account and supplied data showing that since 2012, the number of tours it has sent to the KFC Yum! Center has increased. |
| As concert ticket prices have skyrocketed in recent years, lawmakers and federal agencies have scrutinized the market, concerned about fairness toward consumers and toward competitors. Those efforts have intensified over the last few months. | As concert ticket prices have skyrocketed in recent years, lawmakers and federal agencies have scrutinized the market, concerned about fairness toward consumers and toward competitors. Those efforts have intensified over the last few months. |
| In August, Senators Richard Blumenthal of Connecticut and Amy Klobuchar of Minnesota asked Mr. Delrahimto investigate the state of competition in ticketing, pointing specifically to Live Nation and asking that the decree be extended. In their request, they cited an investigation by The Times last year that discussed the incidents in Louisville and other cities and reported how some of Live Nation’s competitors had complained to the government about its business practices, saying it had effectively stifled competition. | In August, Senators Richard Blumenthal of Connecticut and Amy Klobuchar of Minnesota asked Mr. Delrahimto investigate the state of competition in ticketing, pointing specifically to Live Nation and asking that the decree be extended. In their request, they cited an investigation by The Times last year that discussed the incidents in Louisville and other cities and reported how some of Live Nation’s competitors had complained to the government about its business practices, saying it had effectively stifled competition. |
| This month, members of the House Judiciary subcommittee on antitrust wrote to Mr. Delrahim with similar concerns, asking him to “take all necessary action to protect consumers and enhance competition.” | This month, members of the House Judiciary subcommittee on antitrust wrote to Mr. Delrahim with similar concerns, asking him to “take all necessary action to protect consumers and enhance competition.” |
| A Justice Department official, who asked not to be named because of the sensitive nature of the investigation, said Mr. Delrahim had become similarly concerned that the merger had harmed rivals, led to higher ticket prices for events and hampered innovation. | A Justice Department official, who asked not to be named because of the sensitive nature of the investigation, said Mr. Delrahim had become similarly concerned that the merger had harmed rivals, led to higher ticket prices for events and hampered innovation. |
| Justice officials in the Trump era have been unusually aggressive toward mergers of companies who are not direct competitors, but operate in adjacent business lines, as Live Nation and Ticketmaster once did. For decades, such deals, known as vertical mergers, had been largely approved by the Justice Department because it is difficult to prove a reduction in competition or harms to consumers with such mergers. | Justice officials in the Trump era have been unusually aggressive toward mergers of companies who are not direct competitors, but operate in adjacent business lines, as Live Nation and Ticketmaster once did. For decades, such deals, known as vertical mergers, had been largely approved by the Justice Department because it is difficult to prove a reduction in competition or harms to consumers with such mergers. |
| But Mr. Delrahim shocked corporate America in 2017 by moving to block AT&T’s merger with Time Warner, the first major challenge of a vertical merger in three decades. The government later lost the case in court. | But Mr. Delrahim shocked corporate America in 2017 by moving to block AT&T’s merger with Time Warner, the first major challenge of a vertical merger in three decades. The government later lost the case in court. |
| There has been a recent swell of concern by lawmakers and antitrust enforcers over corporate consolidation in the technology industry. In June, the Federal Trade Commission and Department of Justice confirmed reports of broad investigations into the abuse of monopoly power by the big tech companies Google, Facebook, Amazon and Apple. Earlier this month, Attorney General William P. Barr signaled the antitrust investigations of tech platforms had broadened to include privacy abuses and hosting illegal content online. | There has been a recent swell of concern by lawmakers and antitrust enforcers over corporate consolidation in the technology industry. In June, the Federal Trade Commission and Department of Justice confirmed reports of broad investigations into the abuse of monopoly power by the big tech companies Google, Facebook, Amazon and Apple. Earlier this month, Attorney General William P. Barr signaled the antitrust investigations of tech platforms had broadened to include privacy abuses and hosting illegal content online. |