It is being reported that the U.S. Justice Department will soon take legal action against Live Nation because they believe that the company has been trying to coerce concert venues into using its Ticketmaster subsidiary.
The news comes only months after it was announced that the Justice Department was officially investigating whether Live Nation was in violation of the consent degree that gave it conditional approval to acquire Ticketmaster almost ten years earlier. This decree required the company to behave in a way that would maintain competition in the ticketing marketplace so that prices would not soar for consumers.
But critics of the consent decree, including many U.S. legislators, believe that prices have soared directly due to Live Nation’s alleged conduct. According to Pollstar, ticket prices for concerts have increased 50% since the acquisition of Ticketmaster, with an average ticket price now $92.42.
However, Live Nation has and continues to insist that it has been in full compliance with the decree. Michael Rapino, who is the CEO of Live Nation, said prior to the announcement of the investigation that the decree allows the company to make decisions that are in its best interest. Accordingly, booking tour dates at a venue that does not use Ticketmaster may not make sense for the company.
According to sources speaking to the Wall Street Journal, the Justice Department will not only ask the judge in the case to prevent further improper behavior on the part of Live Nation, but it will also ask the judge to extend the term of the consent degree for “several years.”
In 2010, Live Nation’s acquisition of Ticketmaster created an entity that essentially controls 80% of the U.S. ticketing marketplace. It is also the largest concert promoter in the world, which many believe is a major conflict of interest. In fact, the Justice Department is accusing Live Nation of using their dominance in concert promotion toward the betterment of their ticketing business and at the expense of consumers.