With the merger now complete, Live Nation Entertainment, the newly formed company from the combined Live Nation and Ticketmaster, will face considerable scrutiny from...

With the merger now complete, Live Nation Entertainment, the newly formed company from the combined Live Nation and Ticketmaster, will face considerable scrutiny from consumer protection groups and others who remain skeptical of the Department of Justice’s (DOJ) decision to approve the deal.

DOJ attorneys investigated the merger for a year on potential antitrust grounds before finally approving it with the stipulations that Ticketmaster license its ticketing software to Anschutz Entertainment Group (AEG) and sell its Paciolan ticketing division to Philadelphia-area entertainment conglomerate Comcast-Spectacor.

The DOJ believes the moves will help preserve and strengthen competition in the ticketing and live entertainment industries, which Ticketmaster and Live Nation already dominated, and under a consent decree agreement the department vowed to vigorously watch over the combined companies to ensure they’re not retaliating against competitors and former clients.

Consumer protection groups and others are not so sure.

“The DOJ has asked consumers, independent promoters, ticket brokers, artists, and venue owners to take a very large leap of faith – that the conditions imposed on the merger will improve competition and ultimately lead to greater choice and lower prices,” Sally Greenberg, executive director of the National Consumers League, said in a statement. Greenberg’s group helped form TicketDisaster.org, a Web site and coalition of consumer protection groups that opposed the merger.

“While we appreciate the efforts of the DOJ to extract meaningful concessions from the parties, we remain concerned that these two companies, with a history of anti-consumer behavior, will abide only by the letter, and not the spirit of the settlement agreement. It is therefore critically important that the DOJ hold the merged company’s feet to the fire to ensure that the settlement will have its intended effect. The consumer groups, venue owners, promoters, and ticket broker members of our coalition will remain vigilant to ensure that DOJ fulfills this watchdog function.”

A glaring omission in the DOJ decision is what will happen to Ticketmaster’s secondary ticket market holdings, TicketExchange and TicketsNow. Ticketmaster allegedly tried and failed to overtake the secondary market a few years ago under a scheme exposed by the Wall Street Journal codenamed Project Showtime, but both Irving Azoff and Michael Rapino, the CEOs of Ticketmaster and Live Nation, vowed during congressional testimony to virtually destroy the secondary ticket market with paperless ticketing, dynamic pricing and other initiatives.

Gary Adler, general counsel for the National Association of Ticket Brokers (NATB), said brokers and others will keep up the pressure on Live Nation Entertainment to treat consumers and ticket brokers fairly. The NATB joined with the TicketDisaster.org crew to oppose the merger.

“While [the DOJ’s] decision is not the strongest in terms of protecting consumers, competition, and choice in the industry, it is all the more reason why consumers should continue to stand up and voice their concerns with this live entertainment monopoly. The fight is not over. Our efforts to protect the rights of the consumer by exposing Ticketmaster’s anti-consumer activities, including the use of paperless ticketing and excessive fees, are still priority number one,” Adler said.

Texas-based ticket broker Joseph Carlson is already claiming that Live Nation is allegedly playing games with premium tickets to upcoming James Taylor concerts.

In a letter he sent to several government officials, Carlson alleges that Live Nation held back thousands of prime floor seats for the singer-songwriter’s upcoming tour, which Carlson believes Live Nation will resell later. He urges officials to mandate that at least 5 percent of premium tickets be made available for all concerts, and he said fans and brokers should continue to write to the DOJ to protest the merger.

“By allowing this merger you have made it impossible for the average fan to get good seats for most concerts that go on sale in America,” Carlson wrote.

Emily Rusch, state director of the California Public Interest Research Group (CALPIRG), was disappointed the merger was not rejected outright, but she believes there are safeguards for consumers and others if enforced.

“While Live Nation Entertainment will continue to be undeniably powerful in the concert industry, the settlement creates far more enforcement tools to put an end to their worst anti-competitive practices,” Rusch said. “Now the Department of Justice and the Federal Trade Commission (FTC) must aggressively use those tools to ensure anti-consumer practices are stopped and competition on the marketplace is protected.”

“The U.S. Department of Justice has determined that the merger does not create an anti-competitive threat. However, we continue to believe this combination will result in higher ticket prices for fans,” said Joe Cohen, CEO and founder of UK-based secondary ticket company Seatwave. Cohen is a former Ticketmaster executive, but now considers the company to be a competitor in the UK.

Cohen added, “Primary market ticket prices have increased at approximately 4 percent per year for the past ten years, much higher than the Consumer Price Index. And the stock market’s welcome of the merger last night, which saw shares in both companies rise by as much as 16 percent would indicate that investors believe this trend will continue or possibly accelerate.”

As of about 1:45pm today, January 26, Live Nation’s stock price, which trades under the symbol LYV, was up about 15 percent compared to yesterday’s close and was selling for $12.17 per share.

And since the announcement of the DOJ decision, Liberty Media is reportedly trying to increase its stake in Live Nation by possibly buying close to 35 million shares, which would give Liberty Media 35 percent of Live Nation.

“The dominant market power of the newly-merged Live Nation Entertainment will require both the DOJ and FTC to commit to a vigorous oversight capacity, including additional enforcement actions where necessary,” said attorney David Balto, former FTC policy director. “It will be incumbent upon enforcement authorities to listen to the voices of millions of consumers who attend live events to ensure that they, not the merged company, are the ultimately beneficiaries of this agreement.”