The suit alleges Ticketmaster’s parent, Live Nation Entertainment, engaged in “fraudulent, price-fixing and antitrust-law violations when selling advance tickets.”
The Ticketmaster website was overwhelmed by sales from “verified fans”, who numbered around 3 million. The site crashed a lot and fans found themselves experiencing long delays and unable to checkout with tickets.
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The company canceled the general sale due to “extraordinarily high demands” and “insufficient remaining ticket inventory”. There were complaints that bots were gaming the system, and tickets were being resold at a premium of thousands of dollars.
Ticketmaster charges an unspecified service fee per ticket. As the lower priced tickets became unavailable, fans opted for the more expensive tickets. It is possible that with more expensive tickets, the service fee charged by Ticketmaster may increase. This is one of the charges.
The US Senate anti-trust panel has said it will hold a focused hearing on whether consolidation in the entertainment and ticketing industry hurts customers and performers. Panel lead, Senator Amy Klobuchar, said, “The high fees, site disruption and cancellations show how Ticketmaster’s dominant market position means the company faces little to no pressure to innovate and improve. “
It’s quite conceivable that some of the senators on that panel are “swifties,” as fans of the pop-star are known. The panel may recommend that Ticketmaster – Live Nation be disbanded. Ticketmaster was merged with Live Nation in 2010, where the US Department of Justice dictated the terms. At the time, it was said that the merger would lead to increased competition. Instead, the senators claim, “Ticketmaster prices have more than tripled”.
Ticketmaster apps and platforms have the leading market share in the US live entertainment ticketing market, which before the pandemic was worth more than $10 billion annually. After a devastating crash in 2020 and 2021, the market is almost back to the same level. In January-March 2022, Ticketmaster had about 55 per cent market share. Its share is likely to increase to 60 percent after it partners with Snapchat in early 2022 to allow easier transactions by Snapchat users. It gained over 2 million new users in October 2022.
There are other ticketing apps and simply having dominant market share does not warrant anti-trust scrutiny. Competition commissions such as the US Federal Trade Commission (or India’s CCI, or the EU’s European Commission) try to decide whether monopolistic concentration leads to highly concentrated markets in terms of pricing, quality of service, compensation for workers, etc. affected or not. Of course, those are the allegations here.
“Scalping” or charging a black-market premium on tickets is common practice. Ticketing platforms must be prepared for scalpers using bots, who bid to buy multiple blocks of tickets, and log in such large numbers that they force legitimate customers off the site. It’s like a denial-of-service attack with a website loaded with so many automated requests that it can’t function.
But experience shows that it is possible to deal with even large scales of complexity. Compare the chaos of era pre-sales with ticket sales at the Qatar World Cup. With all due respect to Ms. Swift, there are 1,000 times that number of soccer fans who try to buy tickets with the complexities of transactions in multiple currencies, etc. Reconfirm tickets).
But FIFA countered by making tickets available a year in advance, before the final list of 32 countries was known. So far, 16 matches have witnessed over 2.45 million spectators, and the remaining 16 matches have over 96 per cent bookings.
FIFA’s ticketing links customers with verifiable identification (linked to a passport) with a digital pass called the Haya Card. The e-ticket and hayya double as a Qatar visa. There are limits on the number of tickets a customer can purchase. Tickets can be resold through the FIFA platform, but only at face value. Of course, there are ways to extract and generate a premium on resale. But FIFA makes it as hard as it can, and it’s been cracking down on scalpers for years.
Referring to Senator Klobuchar’s opinion about the need for reform and innovation, FIFA has an incentive to ensure smooth ticketing, although it is a monopoly – frustrated football fans are more likely to riot than file lawsuits . The World Cup is a counter-example that is possible under fairly challenging conditions without online ticketing, sans scalping and frequent crashes.
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