Is Ticketmaster a monopoly?

NOVEMBER 18TH should have been a momentous day for Taylor Swift’s fans. Tickets for the American leg of the pop star’s tour next year—her first since 2018—were due to be released to the general public on Ticketmaster, an online ticket vendor. But on November 17th the company abruptly cancelled the sale, saying it had too few tickets left and problems with its ticketing system after a botched early release on November 15th. Ticketmaster had invited fans to register for the pre-release and verified those who could take part. This was an attempt to crack down on bots and ticket touts and to manage high demand. But the sale was plagued with glitches and delays. The firm said over 2m tickets were sold—but many soon appeared on resale sites for eye-watering sums.

The bad blood extends beyond the ranks of infuriated Swifties (as Ms Swift’s vociferous fans are known). The pop star herself expressed frustration with Ticketmaster on social media. Jonathan Skrmetti, the Republican attorney-general of Tennessee, a state with a huge music industry, said he would look into the pre-release fiasco. On Friday Amy Klobuchar, the Democratic chair of the Senate antitrust subcommittee, said Congress would hold a hearing on Ticketmaster before the end of the year. The New York Times reported that in recent months America’s Department of Justice (DoJ) has been investigating whether Live Nation Entertainment (LNE), Ticketmaster’s parent company, is a monopoly. Is it?

In 2010 the DoJ approved Ticketmaster’s merger with Live Nation, a venue operator, provided that it adhered to measures drawn up to protect competition in the primary ticketing sector. This included Ticketmaster divesting some of its business to competitors. But those safeguards seem to have failed. Typically, says Michael Carrier of Rutgers University, a market share above 70% is enough to control a market. According to a report by the Government Accountability Office, America’s congressional watchdog, published in 2018, Ticketmaster controlled more than 80% of the primary ticketing market prior to the merger and was “still the market leader as of 2017”. But LNE’s chief financial officer says it is not as big as it is often thought: he recently told NPR that though Ticketmaster does not have an exact figure, its estimated market share is 20-30%. That huge discrepancy probably means that LNE is defining the industry more broadly. It seems to be including concert promotion which makes its market share seem smaller.

Monopolies are not inherently illegal. The Federal Trade Commission (FTC) approves of those obtained through “superior products, innovation or business acumen”. The problem comes when a perceived monopoly engages in anti-competitive behaviour to exclude other companies from the market. Ticketmaster and LNE have faced numerous accusations to that effect. In the mid-1990s Pearl Jam, a rock band, working with the DoJ, alleged that by buying up its competitors, Ticketmaster left artists and fans with no alternative and subjected them to exorbitant fees. That case was quietly closed in 1995. Earlier this year a class-action lawsuit alleged that Ticketmaster and LNE use their market power to force fans into arbitration with a new mediator they accuse of having financial links with the companies. Ticketmaster and LNE responded denying the accusations, saying the plaintiffs were overstating the impact of the new arbitrator.

The approach America’s regulators take to trust busting has gone through a sea change under the current administration. President Joe Biden has bemoaned the rise of monopolies, including in the ticketing industry. In 2021 he appointed Lina Khan, known for calling for the breakup of several big tech firms, as chair of the FTC. But even with agencies more willing to pursue antitrust cases, irate Swifties would need proof of anti-competitive behaviour. Shoddy service is not enough. Still, the ticketing debacle emphasises the chilling effect of limited competition. A bigger range of large vendors could increase the pressure on Ticketmaster to improve its sales platform. That’s something fans could at last applaud.