Andy on the Road

25 January 2010

US DoJ approves Live Nation / Ticketmaster Merger

Filed under: followup,lawsandsausages,music — Andy @ 5:13 pm

Wired has the scoop.  While this is not dispositive should someone eventually sue under a civil antitrust theory, it means the government won’t block the action directly.

The modified agreement – requiring the licensing of Ticketmaster’s software to AEG and some other “suitable company” for five years – rings a little hollow to me.  Reservations aside, I do hold out hope for the clause strictly prohibiting the retaliation against venues choosing to use another ticketing service or promoter when booking a Live Nation artist.

But there’s an underlying vertical integration concern that seems unanswered by Wired’s piece. After all, Live Nation presently owns about a hundred venues throughout the United States, and holds management arrangements with dozens more.  If the settlement is structured so that venues are left with the choices as the “consumer” in this market, and LN/TM owns the venue, can we really expect the venue to not use their own ticketing agents and concert promoters?  How are promoters expected to compete for venue business with other promoters when the other promoters own the actual venues?

The FTC and DoJ will have to watch this settlement like two hawks to keep the collusion practices out of the business.  I’ll be sure to post a link should I uncover it in my research. I believe it will be published for an open comment period in the Federal Register.

Update: After reading the DoJ press release I was pleased to find the following information:

The settlement also sets up firewalls that protect confidential and valuable competitor data by preventing the merged firm from using information gleaned from its ticketing business in its day-to-day operations of its promotions or artist management business.

That is the principal concern I had with the settlement, as I expressed here.  I know we do this in other industries, but I’m still wary of a practice that allows a conglomerate to conduct both sides of an exchange and rely on ethics and a settlement alone to keep them from using their combined information to an unfair advantage.

Update 2 (1/26): The Future of Music Coalition points to an excellent opinion in the LA Times from yesterday, which adds this about the provisions guarding competitor promoters and ticketing companies:

Those provisions will only be effective, however, if they’re well enforced. There’s no structural protection. Consequently, the reaction to the deal from opponents of the deal was muted praise. John D. Breyault of the National Consumers League, part of the TicketDisaster.org coalition that opposed the merger, said his group would have been happier had the Justice Department sought to block the deal. “The conditions that they have imposed on this merger are not insignificant,” he added, “if DOJ is committed to strong and enduring enforcement of the consent decree.”

The piece also adds a quote from Seth Hurwitz, owner of DC’s beloved 9:30 Club, which is worth posting here:

It seems the DOJ has created a healthier atmosphere for venues to explore other ticketing providers. However, unless any promoter is free to use any ticketing company they wish, at any venue, at any time, then nothing has been solved. In America, no one should be forced to do business with a company. If one ticketing company has a lock on an arena for instance, I could still be forced to have my competitor sell my tickets, which is an issue for a host of reasons including they can gather all my financial information and my customers’ information. We’re waiting to see how the DOJ will address this. The DOJ’s intent to spur competition is there, but it must be backed up with genuine mechanics to ensure independent promoters can try to compete on a level playing field.

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