The U.S. Justice Department and 17 states have intervened in the proposed merger of Ticketmaster and Live Nation, demanding changes that will conform to anti-trust laws and protect consumers.
As a result of the combined federal and state effort, the newly combined company is required to make significant changes to the merger agreement.
"Our office became concerned that Live Nation and Ticketmaster would be the only option to get tickets to concerts when they announced their merger," said Massachusetts Attorney General Martha Coakley. "We are pleased with today's settlement, which should create a more competitive ticketing market.
"Inspiring and maintaining a competitive and innovative market always benefits consumers," said Ohio Attorney General Cordray. "The settlement we reached today preserves competition in the entertainment industry, and will allow smaller companies the opportunity to compete while putting pressure on the larger companies to do their jobs well."
At issue is competition and the price consumers will have to pay for tickets. In 2008, Ticketmaster had 80 percent of the primary ticketing services market. Ticketmaster and Live Nation - Ticketmaster's primary source of competition - announced plans to merge in February 2009.
Eliminating Competition
The merger was poised to eliminate Ticketmaster's largest competitor in the primary ticketing service market, and as originally proposed, threatened to lessen competition in that market, in all likelihood resulting in higher prices and less innovation for consumers.
After reviewing the proposed merger, the Department of Justice and 17 state Attorneys General decided that divestitures and anti-retaliation provisions were necessary to protect competition. Ticketmaster must provide access to one of its major technology platforms and sell Paciolan, a Delaware corporation that provides ticketing services throughout the United States and is owned by Ticketmaster. The federal and state officials are hoping to eliminate consumer complaints, like this one about Ticketmaster:
"Every time I am forced to use this company I am infuriated," Melanie, of Calabasas, Calif., told ConsumerAffairs.com earlier this month. "This time, after five phone calls lasting over three hours in length total, I received one ticket and $15.00 worth of extortionate charges, which are each hilariously termed from facilities charge, convenience charge, processing fee and my favorite TicketFast (printing fee). This is outrageous."
Technology sharing
The settlement is aimed at promoting more competition, so that consumers don't face steep add-on charges. Ticketmaster has agreed to provide its technology platform to AEG Worldwide, the second largest concert promoter in the United States. By acquiring Ticketmaster's technology platform, AEG would be able to provide both primary ticketing and concert promotion services to venues.
"The goal of this agreement is to maintain competition in the ticket marketplace for the benefit of concert fans throughout Pennsylvania and across the country," said Pennsylvania Attorney General Tom Corbett.
"The Department of Justice's proposed remedy promotes robust competition for primary ticketing services and preserves incentives for competitors to innovate and discount, which will benefit consumers," said Christine Varney, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. "The proposed settlement allows for strong competitors to Ticketmaster, allowing concert venues to have more and better choices for their ticketing needs, and provides for anti-retaliation provisions, which will keep the merged company in check."
Comcast, as the likely buyer of Paciolan, is expected to become a stronger competitor for primary ticketing services. As a result of their acquiring the divested assets, these companies will have the tools needed to become more effective competitors in primary ticket servicers, according to the federal and state officials.
No retaliation
In addition to divesting assets, the merged entity has agreed that it will not retaliate against a venue that is contracting or is contemplating contracting with another company for ticketing services. Additionally, the merged firm cannot require venues to use the firm's concert promotion services or artists as a condition for using the firm's primary ticketing services. The merged firm may not use concert ticketing data it have collected for the benefit of its non-ticketing businesses or share that data with others.
The settlement, if approved by the court, resolves the competitive concerns of the U.S. Department of Justice and the 17 states as set forth in a complaint filed simultaneously with the proposed settlement today in the U.S. District Court of the District of Columbia.
The states taking part in the settlement are Arizona, Arkansas, California, Florida, Illinois, Iowa, Louisiana, Massachusetts, Nebraska, Nevada, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, and Wisconsin.
