At an antitrust enforcement oversight hearing held by the Senate Judiciary Subcommittee on Antitrust, Makan Delrahim, Assistant Attorney General for the Department of Justice Antitrust Division, confirmed that Live Nation (NASDAQ: LYV) is under investigation for alleged anti-competitive behavior and its adherence to a 2010 consent decree.
While he declined to elaborate further, he did confirm that his department was “examining allegations of violations” of the decree, which Live Nation and Ticketmaster agreed to prior to the two companies merging. The decree included Ticketmaster licensing its software to competitors and offload subsidiary Paciolan, among other requirements.
In recent years, allegations have surfaced that Live Nation/Ticketmaster have “flouted” the decree in their business practice as the largest promoter and ticketer in the world. In August, Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) wrote AAG Delrahim requesting that his office conduct an investigation into the industry and Live Nation Entertainment’s adherence to the consent decree.
“We are deeply disturbed by reports that Ticketmaster has violated the behavioral conditions by retaliating against venues that use a competing ticket platform,” the senators wrote, referencing a New York Times article outlining allegations of anti-competitive practices the company faces from some within the industry. “These reports raise questions about whether the Department has effectively enforced the merger conditions.”
Live Nation and Ticketmaster issued a statement once again defending their practices and allegations that they violate anti-trust law or the consent decree.
“As we have previously stated, Live Nation and Ticketmaster have always complied with their obligations under the consent decree,” reads the statement, published by Seeking Alpha. “We do not force anyone into ticketing agreements by leveraging content, and we do not retaliate against venues that choose other ticketing providers.”
Live Nation Entertainment CEO Michael Rapino also offered a lengthy take on his company consistently being implied as in violation of the consent decree while speaking at Goldman Sachs’ Communacopia conference in New York Wednesday. Variety reported on his comments extensively:
“There’s no new litigation, no new claims, no new anything,” he told the audience. “WE educate all of our employees: ‘This is how you go to market [with] Ticketmaster versus Live Nation, this and this is what you can’t say. Win the business straight… When we win a venue in Kansas City or O.A., where we took over a venue from a competitor, of course they’re gonna run to the DOJ. But we’re too smart for that, we’re very clear on what we can and can’t do.”
As far as any potential action to be taken following the investigation, AAG Delrahim outlined the difficulties in bringing action against companies based on consent decrees brought by prior administrations in one exchange with Sen. Blumenthal.
“All of our consent decrees going forward since I’ve been confirmed include provisions that forces the party to agree to allow standard for review,” he told the subcommittee. “The organic standard for violation of a consent decree – which is probably why we haven’t seen enforcement of consent decrees – was that a term has to be clearly unambiguous and you have to prove it in a court by a clear and convincing standard. I don’t need to tell you how difficult of a standard that is.”
The subcommittee hearing Thursday (Video) discussed a broad array of antitrust enforcement being pursued by both the DOJ and Federal Trade Commission against large tech companies.