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open markets institute
'Historic' DOJ Antitrust Suit Could Topple Live Nation-Ticketmaster Monopoly
"For far too long, Live Nation-Ticketmaster has acted as the mafia boss of the live events industry—using its power to rip off fans with sky-high prices and junk fees, exploit musicians and artists, and bully workers," an expert said.
May 23, 2024
The U.S. Department of Justice and 30 state attorneys general filed an antitrust lawsuit on Thursday against entertainment company Live Nation—and its subsidiary Ticketmaster—calling it an "illegal monopoly," in a move celebrated by public interest groups.
The complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Live Nation engages in exclusionary conduct, barring competitors from entering the industry or expanding their businesses, which leads to higher ticket prices for concertgoers and a smaller take for performers and small-business owners.
U.S. Attorney General Merrick Garland, who leads the DOJ, said in a statement that the company "relies on unlawful, anti-competitive conduct to exercise its monopolistic control over the live events industry." He said the monopoly is bad for fans, artists, promoters, and venues. "It is time to break up Live Nation-Ticketmaster," he said.
Today’s lawsuit by the Justice Department Antitrust Division is an enormous step forward in preventing one company from dictating the ebbs and flows of an entire industry. pic.twitter.com/A2n5NAQJrR
— U.S. Department of Justice (@TheJusticeDept) May 23, 2024
The DOJ's statement cited seven specific tactics that the company has used to eliminate competition:
- Turning Oak View Group, a potential competitor, into a partner;
- Retaliating against potential entrants;
- Threatening and retaliating against venues that work with rivals;
- Locking out competition with exclusionary contracts;
- Blocking venues from using multiple ticketers;
- Restricting artists' access to venues;
- Acquiring competitors and competitive threats.
The 2010 merger of Live Nation and Ticketmaster allowed the merged firm to gain dominance over the industry by combining venue-operating and ticketing, and it used its dominance to wield power by, for example, threatening to boycott bands unless they used Ticketmaster, according to a Thursday statement from the American Economic Liberties Project (AELP).
"Today is a historic, long-awaited day for fans, artists, and independent businesses in the live events industry—the Department of Justice is officially seeking to break up one of America's most infamous monopolies," said Morgan Harper, AELP's director of policy and advocacy. "For far too long, Live Nation-Ticketmaster has acted as the mafia boss of the live events industry—using its power to rip off fans with sky-high prices and junk fees, exploit musicians and artists, and bully workers and small-business owners in the industry."
The lawsuit comes amid a wave of antitrust action by the Biden administration, led by the DOJ and the Federal Trade Commission (FTC), whose chairperson, Lina Khan, has been a prominent critic of Big Tech and monopolistic practices. The DOJ has investigated UnitedHealth Group, the world's largest health insurance company, and filed suits against Apple and Google, while the FTC has taken on Amazon, among others.
While the antitrust actions have faced pushback, public interest groups have applauded them—and pushed for similar action to be taken in the entertainment industry, as the DOJ did on Thursday. Sandeep Vaheesan, legal director of Open Markets Institute, said in a statement that the new suit could be a "critical blow" for Live Nation, to the benefit of the American public.
"Through a series of acquisitions and coercive tactics, Live Nation has unfairly dominated the promotion, hosting, and ticketing of concerts for years to the great detriment of artists, fans, and independent businesses," Vaheesan said. "Critically, rather than attempt to remedy this monopoly through surgical fixes, the government wisely seeks to terminate Live Nation's control of the industry through a breakup of this behemoth."
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'Seismic Win for Workers': FTC Bans Noncompete Clauses
Advocates praised the FTC "for taking a strong stance against this egregious use of corporate power, thereby empowering workers to switch jobs and launch new ventures, and unlocking billions of dollars in worker earnings."
Apr 23, 2024
U.S. workers' rights advocates and groups celebrated on Tuesday after the Federal Trade Commission voted 3-2 along party lines to approve a ban on most noncompete clauses, which Democratic FTC Chair Lina Khansaid "keep wages low, suppress new ideas, and rob the American economy of dynamism."
"The FTC's final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market," Khan added, pointing to the commission's estimates that the policy could mean another $524 for the average worker, over 8,500 new startups, and 17,000 to 29,000 more patents each year.
As Economic Policy Institute (EPI) president Heidi Shierholz explained, "Noncompete agreements are employment provisions that ban workers at one company from working for, or starting, a competing business within a certain period of time after leaving a job."
"These agreements are ubiquitous," she noted, applauding the ban. "EPI research finds that more than 1 out of every 4 private-sector workers—including low-wage workers—are required to enter noncompete agreements as a condition of employment."
The U.S. Chamber of Commerce has suggested it plans to file a lawsuit that, as The American Prospectdetailed, "could more broadly threaten the rulemaking authority the FTC cited when proposing to ban noncompetes."
Already, the tax services and software provider Ryan has filed a legal challenge in federal court in Texas, arguing that the FTC is unconstitutionally structured.
Still, the Democratic commissioners' vote was heralded as a "seismic win for workers." Echoing Khan's critiques of such noncompetes, Public Citizen executive vice president Lisa Gilbert declared that such clauses "inflict devastating harms on tens of millions of workers across the economy."
"The pervasive use of noncompete clauses limits worker mobility, drives down wages, keeps Americans from pursuing entrepreneurial dreams and creating new businesses, causes more concentrated markets, and keeps workers stuck in unsafe or hostile workplaces," she said. "Noncompete clauses are both an unfair method of competition and aggressively harmful to regular people. The FTC was right to tackle this issue and to finalize this strong rule."
Morgan Harper, director of policy and advocacy at the American Economic Liberties Project, praised the FTC for "listening to the comments of thousands of entrepreneurs and workers of all income levels across industries" and finalizing a rule that "is a clear-cut win."
Demand Progress' Emily Peterson-Cassin similarly commended the commission "for taking a strong stance against this egregious use of corporate power, thereby empowering workers to switch jobs and launch new ventures, and unlocking billions of dollars in worker earnings."
While such agreements are common across various industries, Teófilo Reyes, chief of staff at the Restaurant Opportunities Centers United, said that "many restaurant workers have been stuck at their job, earning as low as $2.13 per hour, because of the noncompete clause that they agreed to have in their contract."
"They didn't know that it would affect their wages and livelihood," Reyes stressed. "Most workers cannot negotiate their way out of a noncompete clause because noncompetes are buried in the fine print of employment contracts. A full third of noncompete clauses are presented after a worker has accepted a job."
Student Borrower Protection Center (SBPC) executive director Mike Pierce pointed out that the FTC on Tuesday "recognized the harmful role debt plays in the workplace, including the growing use of training repayment agreement provisions, or TRAPs, and took action to outlaw TRAPs and all other employer-driven debt that serve the same functions as noncompete agreements."
Sandeep Vaheesan, legal director at Open Markets Institute, highlighted that the addition came after his group, SBPC, and others submitted comments on the "significant gap" in the commission's initial January 2023 proposal, and also welcomed that "the final rule prohibits both conventional noncompete clauses and newfangled versions like TRAPs."
Jonathan Harris, a Loyola Marymount University law professor and SBPC senior fellow, said that "by also banning functional noncompetes, the rule stays one step ahead of employers who use 'stay-or-pay' contracts as workarounds to existing restrictions on traditional noncompetes. The FTC has decided to try to avoid a game of whack-a-mole with employers and their creative attorneys, which worker advocates will applaud."
Among those applauding was Jean Ross, president of National Nurses United, who said that "the new FTC rule will limit the ability of employers to use debt to lock nurses into unsafe jobs and will protect their role as patient advocates."
Angela Huffman, president of Farm Action, also cheered the effort to stop corporations from holding employees "hostage," saying that "this rule is a critical step for protecting our nation's workers and making labor markets fairer and more competitive."
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FTC-DOJ Merger Guidelines Aim to 'Restore Competition and Strengthen Democracy'
One expert called the guidance "a game-changer for antitrust enforcement, incorporating decades of new learnings and thousands of public comments from working families and small businesses."
Dec 18, 2023
Antitrust campaigners and experts on Monday celebrated the Biden administration's new guidelines for mergers and acquisitions, which supporters say will "restore competition and strengthen democracy."
Farm Action co-founder and chief strategy officer Joe Maxwell commended the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) "for delivering on their commitment to restore competition to our economy."
"For more than 40 years, the merger guidelines have been void of a review for competition," he said. "During this period of time, unprecedented concentration across U.S. markets has driven farmers and small businesses out of business."
"The new guidelines provide a roadmap to bring first principles of the antitrust laws into the 21st century."
Erik Peinert, research manager and editor at the American Economic Liberties Project, declared that "the finalized merger guidelines are a game-changer for antitrust enforcement, incorporating decades of new learnings and thousands of public comments from working families and small businesses."
"After almost 50 years of significant underenforcement, we're thrilled to see the antitrust agencies make a comprehensive update to the merger guidelines, and look forward to seeing them vigorously enforced," he continued. "The new guidelines provide a roadmap to bring first principles of the antitrust laws into the 21st century."
"Previous guidelines ignored or underappreciated the harms from practices like vertical mergers and serial acquisitions, as well as the harms to workers," he highlighted. "A generation of these deals has suppressed worker pay, increased prices, and embrittled our supply chains."
Open Markets Institute legal director Sandeep Vaheesan also praised the agencies behind the new guidelines, which he said "put fealty to law front and center again and seek to implement congressional intent, instead of their own ideological preferences."
"By relying on market share tests for deciding the legality of certain mergers, the new guidelines are more faithful to the Clayton Act than the 2010 horizontal merger guidelines were," Vaheesan explained. "They are also more in accord with empirical research on the effects of mergers and acquisitions, which finds that corporate consolidation can harm democratic balances and institutions, as well as workers, producers, and consumers."
"In our comments on the draft guidelines, we called on the DOJ and the FTC, in the final guidelines, to adopt lower market share tests to cover consolidations outside the most highly concentrated markets and to reject unequivocally an efficiencies defense for presumptively illegal mergers," he noted. "Although the agencies stuck with their original approach in the final document, these guidelines are a material improvement over the status quo and will help the two agencies do a better job of stopping and deterring harmful corporate consolidation going forward."
The guidelines released Monday reflect feedback the agencies received after putting out a draft in July.
FTC Chair Lina Khan expressed gratitude for "the thousands of comments submitted by American workers, consumers, entrepreneurs, farmers, business owners, and other members of the public," stressing that "this input directly informed the guidelines and allowed us to pursue this work with a deeper understanding of the real-life stakes of merger enforcement."
Attorney General Merrick Garland said in a statement that the guidelines "provide transparency" into Justice Department action and pledged that the DOJ "will continue to vigorously enforce the laws that safeguard competition and protect all Americans."
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