As the federal review of the proposed Ticketmaster/Live Nation merger begins to wind down, a still-pending 2006 lawsuit against Live Nation over alleged antitrust activity sheds some light on how the company is no stranger to antitrust concerns.
The lawsuit, originally filed in separate regions of the country, has class action status but is being temporarily stayed by the presiding judge until an unrelated class action case is decided. On behalf of concert ticket buyers from 23 regions across the U.S., the lawsuit alleges that Live Nation and its former parent company Clear Channel Communications used anti-competitive tactics to unfairly control ticket prices, keeping them artificially high.
“A bunch of cases were consolidated together, and the matter is still ongoing,”
Colorado-based attorney Charles Lilley told TicketNews. Lilley filed one of the separate regional lawsuits against Clear Channel and Live Nation.
The 23 original regions have been re-described as five general areas – Colorado, Southern California, Chicago, New England and New York/New Jersey – and the alleged anti-competitive activity dates back to the late 1990s, before Clear Channel spun off Live Nation as a standalone concert promoter.
“This class action lawsuit arises out of Defendants’ unlawful and anticompetitive scheme to obtain, maintain, and leverage monopoly power in the Colorado Region concert promotion market, resulting in artificially inflated concert ticket prices and unlawful profits for Defendants at the expense of Plaintiff and the Class,” the Colorado lawsuit states. The other regional cases offer similar complaints.
The lawsuit alleges that for a period from the late 1990s to the early 2000s, Clear Channel unfairly contributed to, and benefitted from, concert prices in the U.S. growing at more than 60 percent, while the consumer price index grew at a far less staggering rate of well below 25 percent. Among the charges the lawsuit makes against the companies is that Clear Channel allegedly limited radio air play on its stations to acts that used its concert promotion services. Those allegations were investigated by the U.S. Justice Department and later discontinued when Live Nation was spun off from Clear Channel.
However, the lawsuit alleges those types of anti-competitive activities continued after the spin off.
The Chicago-based law firm Wexler Wallace LLP is now the lead counsel for the class action lawsuit, and according to attorney Jennifer Fountain Connolly, the case is temporarily on hold until the Ninth Circuit Court in San Francisco decides on an unrelated class action lawsuit involving Walmart. How that case is decided could affect how the class in the Clear Channel/Live Nation case is determined in the future.
“We’re waiting on this other, unrelated case,” Connolly told TicketNews, adding that it could be another year or more before the Clear Channel/Live Nation case resumes.
As for whether the case could have any bearing on the Ticketmaster/Live Nation merger, Connolly does not think so, but she does not know if the matter was discussed by Justice Department officials.
“It doesn’t directly impact it, at least not to my knowledge, though it could be in the voluminous filings surrounding that situation,” Connolly said. “Our case reaches back to conduct as early as 1998, so the investigators are probably more interested in what’s going on now.”