A federal District Court for the Southern District of New York found Live Nation — the leading
live entertainment and marketing company — and Ticketmaster (Live Nation’s subsidiary and
the largest “primary ticketer” in the U.S.) liable on all counts for unlawfully maintaining a
monopoly.
This past April a jury found enough proof that the two (collectively known as just Live Nation)
were guilty of several anticompetitive practices. Among them, the company absorbed
competitors, used exclusive contracts to foreclose the market to rival ticketing firms, and
blocked and restricted access to competing venues.
If the old wisdom guiding antitrust law prevailed, Live Nation may have narrowly escaped
scrutiny as they and others have for decades. This, in part, is because judges have long been
swayed since the 1970s by expert (and expensive) testimony from economists who are skilled at
manufacturing exit ramps with Consumer Welfare Standard (CWS) as their lodestar. Absent an
increased price or “output”- related effect (often referred to as productive efficiencies), as the
CWS suggests, large scale mergers were widely believed to pose no real downstream threat to
competition or the competitive process. Live Nation’s actionable conduct rebukes that
mythology. Despite its name, this boilerplate does little to advance the welfare of consumers or
safeguard democracy from the hands of a small few.
The case at bar stands in opposition to a Trump administration reluctant to punish corporate
lawbreakers. The decision helps to slow the momentum of unwilling agencies/courts to
challenge outcomes produced by bad economic models injected into the law. Revealed in this
lawsuit is how significant market power held by Live Nation is causally linked to less choice in
product (and, indirectly, also labor) markets.
Fewer, larger companies like them reap the benefits of being able to set prices such that it rises
to the level of an unfair practice. The company threatened to retaliate against venues that work
with rival ticketing firms, setting ticket prices far above competitive levels while restricting
artists’ access to other venues, and acquired entrants that were viewed as threats to their market
power – all of which raises costs for consumers by imposing an effective “tax.”
To further curtail bad behavior, the federal government could expand its operations. This could
mean bestowing resources to enforcement agencies indexed to the size of the real economy. It
could also entail new federal agencies all together to deploy currently under-utilized powers to
enforce our economic rights. In doing so these agencies act to restore competition and maintain
fidelity to the rule of law in a few ways. With Live Nation as an example, they could order Live
Nation’s divestiture of Ticketmaster, grant money damages, or enjoin further anticompetitive
practices.
Ultimately, antitrust laws meant to curb outsized power were not designed to be perishable.
Thurgood Marshall famously lamented that antitrust laws represented “the Magna Carta of free
enterprise.” Consumers and artists are now entitled to relief from this constrained choice on free
enterprise, venue coercion, and overcharging.
Monopolization in its essence is an outcome of rules about market power intertwined with policy
decisions concerning how to best carry out the project of democratic self-rule. Punishing Live
Nation is no doubt a deeply symbolic choice. It may very well deter other attempts to
monopolize. But monopolies are also worthy of scrutiny because they impose a nearly
unaccountable form of private governance and concentrated political power. Enforcement
against Live Nation thus rests at the nexus of sound economics and good law if spreading
economic and political power, and restoring competition, remain socially desirable.
About the Author
Tyler CLARK is an evening student at UIC Law. He holds
both an undergraduate and advanced degree in economics, and currently
works full-time as an FP&A analyst. Tyler serves as a writer and senior editor
of UIC Law’s student-run publication, The Decisive Utterance, while also
active in the Art & Museum Law Society. After earning his J.D., Tyler hopes to
practice public interest law, teach, and continue developing his skills as a
legal scholar.