Suit Alleges Consumers Pay Excessive Prices on Ticketmaster's 'Anticompetitive' Practices
Concertgoers must pay “supracompetitive prices” for event tickets because Ticketmaster “levies excessively high fees in the primary market on tickets that it sells, which are then passed down to consumers in the secondary market,” an antitrust class action alleged Wednesday (docket 1:24-cv-04106) in U.S. District Court for Southern New York.
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Tamara Stevens bought tickets at supracompetitive prices through secondary seller StubHub for concerts on March 24, May 6, Oct. 22 and Dec. 17, 2022, and on Jan. 6, 2023, said the complaint. Stevens and class members are forced to pay higher prices for events tickets bought on platforms other than Ticketmaster due to “artificially higher prices for concert tickets being sold by Ticketmaster on the primary market as the result of extremely high fees on the sale of each ticket as well as the inflated face-value of the ticket itself,” the complaint alleged.
Ticketmaster parent Live Nation’s exclusive agreements and ownership of U.S. venues allows Live Nation to choose Ticketmaster as the sole primary market ticketing agent for a concert or event, the complaint said. Ticketmaster provides primary ticketing services to more than 10,000 venues, with a renewal rate “'exceeding 100%,’ because there is no effective competition to Ticketmaster when these long-term, exclusive dealing contracts expire,” the complaint said.
When a ticket is sold through Ticketmaster to a primary ticket buyer, the buyer pays “excessively high fees on top of the face-value of the ticket itself,” which is also inflated, the complaint alleged. The primary market purchaser who resells a ticket on the secondary market does so “inclusive of whatever fees and prices were paid initially to Ticketmaster on the primary market,” it said. That cycle continues each time a ticket is resold: “The purchaser pays an inflated price due to Ticketmaster’s conduct on the primary market and Live Nation’s conduct above it.”
Live Nation and Ticketmaster work “in tandem” to eliminate competition in the primary market for tickets via Live Nation’s exclusive agreements with venues “higher up in the distribution chain,” the complaint said. That means possible competitors -- such as StubHub and SeatGeek -- are “shut out from competing in that market," competition that "would cause downward pricing pressure and would push prices to competitive (and, therefore, lower) levels at face-value,” the complaint said.
Without Ticketmaster’s “anticompetitive conduct,” Stevens and class members “would have paid lower prices” for tickets, the complaint contends. Ticketmaster’s growth has come “at the expense of consumers,” it said.
Though Ticketmaster’s competitors charge lower fees, brokers “cannot reap those benefits because they must appease Ticketmaster’s demands or risk losing access to primary market tickets,” alleged the complaint. The defendant has a conditional license: It will allocate primary tickets for a broker to a ticket bank “only if that broker agrees that it will resell those tickets only through Ticketmaster’s secondary ticket platform,” it said. It's able to do so because of the “power it holds over the supply of primary tickets at major concert venues, and because Live Nation, as the dominant concert promoter in the nation, controls the vast bulk of major concert tours,” the complaint said.
Ticketmaster “has walked a narrow line by publicly decrying ticket broker practices while privately encouraging them,” the complaint alleged. Ticketmaster benefited from growth of secondary market concert sales because, due to high demand and limited quantity on the primary market, ticket brokers and scalpers “are incentivized to quickly purchase as many primary tickets as possible.” Real fans fight over the rest, it said. Ticketmaster makes money from initial sales and resales “of the very same concert tickets,” it said.
Ticketmaster entered the secondary ticketing services market by buying existing providers, and it initially kept the platforms separate. More recently, Live Nation and Ticketmaster integrated secondary ticketing service providers into the Ticketmaster platform, and consumers can now buy primary or secondary tickets online from Ticketmaster and "not even know if they are purchasing a primary or secondary ticket,” it said.
The result of the defendants’ anticompetitive behavior is reduced market competition, “giving consumers less choice” over purchasing options, and a manufactured “supply restraint” that keeps primary and secondary market tickets from being resold on a secondary platform other than Ticketmaster’s, said the complaint. Both lead to higher ticket prices, fees and resale value, it said.
The complaint alleges violations of the Sherman Act. The plaintiff seeks injunctive relief, plus awards of statutory, compensatory, consequential, treble, punitive and nominal damages, plus restitution or disgorgement of profits unlawfully obtained and attorneys’ fees and costs.