University of Miami: Ticketmaster’s tactics infuriate, but likely not illegal
Deluged by the demand for Taylor Swift concert tour tickets that far exceeded supply, Ticketmaster’s platform recently crashed. The company, which controls virtually every segment of the music touring industry, canceled public ticket sales—to the outrage of millions of the mega artist’s fans.
An army of “Swifties” unleashed a public relations war alleging monopoly practices, and several state attorneys general and multiple congressional leaders ordered investigations of the music touring industry behemoth.
Yet Mike Kelly, a lecturer in the University of Miami School of Law and antitrust lawyer for more than three decades, and Serona Elton, professor and director of the Music Industry Program at the Frost School of Music, assert that this most recent brouhaha does little more than reshine a spotlight on a long-existing market scenario—one that is virtually impossible to untangle and that benefits consumers in many regards.
“The Department of Justice (DOJ) has been all over this industry and the relationship between venues, artists, tickets, and promoters for as long as I can remember, going back to the Pearl Jam claims of the mid-1990s,” said Kelly.
The antitrust scholar noted that monopolies are not by nature unlawful; in fact, vertical integration—where a range of industry segments are combined—is often encouraged because it increases efficiency, which ultimately generally benefits consumers.
For market dominance to reach the threshold of antitrust violation it would require an “exclusionary act,” Kelly explained. “I characterize the term as a ‘competitive dirty trick’—and not a normal act of competition that makes your product more appealing,” he said.
“Until someone reveals that Ticketmaster committed an exclusionary act, the fact of it crashing its own website claims will not suffice [as evidence of unlawful activity],” he added.
Elton highlighted the importance of examining business practices—behaviors—to differentiate between monopoly practices and violations of the law.
“The Federal Trade Commission (FTC) website says that a company can legally be a monopoly—that in and of itself is not illegal. And charging really high prices is not illegal. It has to do with the practices that the business does,” Elton said.
“You have to look at how a company uses its relationships to leverage the fact that they own different sectors of the industry that they’re involved in and how they leverage those in their business transactions,” she added.
Criticism of Ticketmaster’s practices is far from new, and many leaped to link the recent fiasco with the Taylor Swift concert tour to a 1994 complaint filed with the DOJ by the rock band Pearl Jam alleging anticompetitive and monopoly practices. That case was dismissed with a two-sentence caveat that the department “would continue to monitor competitive developments in the ticketing industry.”
“The two are entirely different scenarios. There’s lots of nuance to this as there always is with everything in the music industry,” said Elton, who has extensive experience as a music industry professional and educator.
For both experts, the genesis for the current scenario dates to the 2010 merger between Ticketmaster and Live Nation. The merger approval was conditioned with a consent decree, with terms that Ticketmaster was to abide by. In 2019, the consent decree was expanded to 2025 and modified.
Kelly asserted that the DOJ has continually monitored terms of the decree and the new congressional hearings will do the same.
“They are undoubtedly looking at the decree, [which] gives authorities access to those companies via a very quick route,” Kelly pointed out. “They have the right to get their questions answered in a quick and easy way.”
He noted that a number of legislators and personnel within the current administration’s DOJ and FTC are highly interested in championing more vigorous antitrust enforcement such as existed in the 1970s but doubted that any new evidence would be produced that violates the existing law.
“If they had found it, you would have heard about it,” Kelly said. “What will likely happen is a lot of sound and fury signifying nothing.”
Nuances and market complexities preclude any real change to the existing scenario, Elton noted.
“It’s easy to point out that this behavior is unacceptable and should not be allowed to happen, but how you reengineer the music touring ecosystem is very complicated,” said Elton. She noted the complex financial interplay between the many different actors involved.
A lot of what has happened has to do with market consolidation, she explained. With economies of scale at work, dealing with one platform in many ways is a more efficient system.
“It’s all so interrelated,” she said. “There’s no magical answer and no simple solution other than to assess if the consent decree has proven effective and, if it hasn’t, why not. If it hasn’t been, then it should be rewritten and better enforced.”
The recent fiasco with Ticketmaster has simply put the music touring industry back on center stage.