US Government launches antitrust suit against Live Nation Entertainment, claiming business practices that harm artists and fans

The United States government, and dozens of states, sued Live Nation Entertainment, a multinational entertainment company, in an antitrust suit Thursday, alleging they monopolized the live entertainment space, harming artists, venues, and concertgoers.

The US Government alleges that Live Nation violated § 1 and 2 of the Sherman Act, an 1890 US antitrust law that prescribes the rules of free competition and prohibits unfair monopolies. § 1 of the Sherman Act states that contracts that limit trade are illegal, whereas § 2 states that every person who attempts to monopolize, or attempts to monopolize, any part of trade, is guilty of a misdemeanor.

Allegations in violation of § 1 of the Act include the categorization of the “use of large amphitheaters and ancillary services” as a relevant Antitrust group under the Sherman Act, and the promotional services sold to artists who are performing in such amphitheaters as a second relevant group under the Sherman Act. The lawsuit against Live Nation alleges that the entertainment company unlawfully requires artists performing in large venues to also purchase promotional services.

Allegations in violation of § 2 of the Sherman Act include Live Nation’s diverting live music to other venues if they do not sign with parent-company Ticketmaster as well as co-opting business partner Oak-View Group to warn venues that they will lose Live Nation contract if they do not sign with Ticketmaster. Live Nation also allegedly delayed sales of secondary tickets through competitor ticketing platforms and refused to publicize events at venues that use other ticketing platforms. Live Nation also imposed long-term, exclusive contracts – ranging from three to 14 years – on significant portions of tickets available.

Additionally, Live Nation has also acquired amphitheaters and certain large music festivals, further decreasing the choice that artists have in seeking services from alternate vendors and thereby violating § 2 of the Sherman Act.

Dozens of states, including Arkansas, Arizona, and Nevada, have joined the lawsuit, claiming that Live Nation has also violated rules on unfair practices and bans on monopolies under state law.

Dan Wall, Vice President of Corporate Affairs at Live Nation, responded in a blog post, stating that Live Nation is not a monopoly because it collects service fees. Wall claimed that monopolies are defined by monopoly “profits” derived from monopoly outward “pricing” to consumers – which Live Nation does not have, especially when compared to other major third-party companies, like Airbnb, which have higher service fees.

Live Nation has yet to file a response within the court.