The Ticketmaster-Live Nation Merger: What Does It Mean for Consumers and the Future of the Concert Business?
CAPAF’s David Balto testifies before the Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition Policy and Consumer Rights on the Ticketmaster-Live Nation merger. Read the full testimony (CAPAF).
As detailed in my testimony, this merger of dominant firms raises serious competitive concerns and could potentially lead to significantly higher prices for the hundreds of thousands of consumers who purchase tickets every day. Moreover, by creating a monopolist in the promotion and ticket purchase markets, rivals in the concert promotion market and competition from secondary ticket services will be severely diminished. The Antitrust Division of the Justice Department should thoroughly investigate this merger and challenge it if it raises a significant threat to reduced competition.
I make the following points in my testimony:
- Ticketmaster holds a monopoly in the ticket sales market. It has faced no significant competition in that market until LiveNation’s recent entry. Ticketmaster’s control of the primary market alone warrants enjoining the merger
- The proposed merger raises serious vertical concerns. By combining a ticketing monopolist with a dominant firm in marquee concert promotion, the merged firm will be able to foreclose competition in both markets, leading to less choice and higher prices
- The proposed merger poses a significant threat to independent concert promotion
- The proposed merger will diminish competition from secondary ticket services which offer the potential for greater rivalry in the ticketing market
- The DOJ should go beyond this merger and investigate anticompetitive conduct in the ticketing market. Similarly, the Federal Trade Commission should investigate deceptive conduct by Ticketmaster. Ticketmaster’s monopoly power is preserved through a series of exclusionary arrangements that diminish the potential for rivals to arise and challenge the monopoly. In the 1990s those charged with antitrust enforcement failed to challenge Ticketmaster’s conduct based on theoretical arguments that consumers were protected by ease of entry into the market or that exclusive arrangements were procompetitive. Because of that inaction, consumers have paid dearly in excessive prices for ticketing services. History has demonstrated that those theoretical arguments that the market would prevent consumer harm have been proven wrong, and consumers have paid dearly in excessive prices for ticketing services. Further competition and consumer protection enforcement action are necessary to prevent the substantial ongoing harm in this market, and this committee should call on both the DOJ and Federal Trade Commission to act.
My testimony today is based on my experience of over a quarter century as an antitrust practitioner—the majority of which was spent as a trial attorney in the Antitrust Division of the Department of Justice—and in several senior management positions, including policy director at the Federal Trade Commission. I have litigated numerous merger cases both for the government and for private parties. I regularly practice before both the agencies, and frequently represent consumer groups raising concerns about mergers under investigation by the Antitrust Division or the FTC.
Today I am here with a simple message for this committee. Although the parties may assert various efficiencies for this merger, this proposal raises very serious competitive concerns. Ticketmaster has perfected and preserved its monopoly power, not by creating better products and services for consumers, but through exclusionary arrangements to exclude its rivals. Now, faced with a significant rival, LiveNation, with the potential to undermine its monopoly—which it cannot drive from the market through exclusionary tactics—it is trying to buy its rival out of the market. It is a cornerstone principle of the antitrust laws that a dominant firm cannot use acquisitions, such as this one, to preserve its monopoly power.
CAPAF’s David Balto testifies before the Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition Policy and Consumer Rights. Read the full testimony (CAPAF).