Senators Question Ticketmaster Head on “Monopolistic” Industry Control
Senators are working with the Federal Telecommunications Commission on a law called the Better Online Ticket Sales Act (2016 law).BOTS() Act, which is intended to penalize and prevent automated bots from purchasing tickets via online sales platforms.
Members of the Senate Judiciary Committee on Tuesday questioned and strongly criticized Joe Berchthold, president of Live Nation Entertainment—parent company of Ticketmaster—for its failed rollout of tickets for a Taylor Swift Concert Tour.
In November, Ticketmaster canceled a planned ticket sale to the general public for Swift’s tour after more than 3.5 billion requests from fans, bots, and scalpers overwhelmed its website.
Antitrust was also raised by committee members, as the company had the highest ticketing platform sales over its competitors.
Chairman Dick Durbin (D.Ill.) criticised the company and its explanations of the issues, saying that they are symptoms of a larger problem.
“The ticketing and live entertainment markets lack competition and they are dominated by a single entity—Live Nation,” He said. “Live Nation merged with TicketMaster in 2010 in a deal that joined the country’s largest ticketing company with its largest event promoter.”
Durbin stated that the Department of Justice (DOJ), as well as attorneys general from several states, had filed lawsuits to block the merger. The merger went through but the DOJ set up a consent decree with conditions, divestitures and other measures to ensure that there was competition in the live entertainment and ticketing markets.
“Unfortunately, that consent decree does not appear to have been effective,” Durbin stated. “In the decade-plus since the merger, Live Nation has consolidated its dominant position in the ticketing and live entertainment markets, and the result is a competition-killing strategy that has left artists and fans paying the price.”
Ticketmaster’s Point of View
In his testimony to the committee, Berchtold said that since the 2010 merger, the company has spent over $1 billion in capital to improve Ticketmaster’s system, including eliminating fraud by bots and ticket scalpers.
“We hear people say that the ticketing markets are less competitive today than they were at the time of the Live Nation–Ticketmaster merger—that’s simply not true,” He said. “Ticketmaster has lost, not gained, market share since the merger.”
He stated that Swift tour bot attacks had been anticipated by the company, but were instead met with. “three times the amount of bot traffic” The company had never experienced anything like it. He said that although the attack didn’t penetrate their systems, it slowed down traffic and stopped it from flowing. Swift and his fans were offered an apology by the company, but he said that Swift was still responsible. “to do better.”
Berchtold said that the BOTS Act should have a larger scope and be enforced.
Blackburn and Blumenthal Join forces
Sen. Marsha Blackburn (R. Tenn.) and Senator Richard Blumenthal (D. Connecticut) called for the FTC’s better enforcement of BOTS Act. Blumenthal sponsored it in the Senate while Blackburn, as a representative, sponsored it in the House.
In the committee hearing Tuesday, Blackburn said the FTC has only enforced the BOTS Act once even though it’s had the authority to do so since 2016, adding that she and Blumenthal plan on doing more work on the Senate Commerce Committee’s Consumer Protection Subcommittee to alleviate the problem for consumers.
Blackburn shared her December experience with Ticketmaster, where she downloaded a ticketing app to take her grandchildren to the Orange Bowl to see the University of Tennessee football team. Blackburn claimed that the app provided tickets and also offered parking, general merchandise, travel options, and other services.
“You are getting a lot of consumer data and consumer information, so I want to know, what are you doing with that data,” She said. “Now you told me yesterday you block about 90 percent of the bot attacks that you get, but that’s a failing grade, and we know that, because—and there ought to be people you can get some good advice from—because our critical infrastructure in this country, whether it is utilities, electric, water, power, banking services, credit card processors, payment processors, health care companies—you know what, they get bot attacks every single day by the thousands. By the thousands. And they have figured it out, but you guys haven’t? This is unbelievable.”
Blackburn blasted Ticketmaster and the FTC, stating that Berchtold is responsible for consumers, while the FTC has authority and responsibility.
Blackburn was asked by Blackburn whether the company had called FTC for assistance with bot attacks during her interview. Berchtold pointed to one cooperating scenario with the FTC, when his company asked for the agency’s assistance in an investigation in 2019.
Blumenthal was not shy in his thanks to Berchtold, for bringing Republicans together with Democrats. “absolutely unified cause.”
“May I suggest, respectfully, that unfortunately your approach today in this hearing is going to solidify that cooperation, because as I hear and read what you have to say, it’s basically, ‘It’s not us, it’s everyone but us,’” Blumenthal stated. “And the fact of the matter is that Live Nation–Ticketmaster is the 800-pound gorilla here. You have clear dominance, monopolistic control. This whole concert ticket system is a mess. It’s a monopolistic mess.”
Music Industry Workers ‘Frustrated’
Interview on CNBCBlumenthal and Blackburn argued for their cause, speaking about privacy, antitrust issues and consumer protections.
“When I am out and about in Nashville, I hear from tour managers, I hear from business managers, talent agents, how frustrated they are with what is happening with Live Nation, with Ticketmaster, and they feel it’s appropriate for us to step in,” Blackburn spoke in the interview. “In 2016 when I was in the House, Senator Schumer—at that point—and I passed the BOTS Act, which gives the FTC the authority to move in and to go after these bots, to work with these ticketing platforms. And the FTC has not exercised that authority.”
She criticized FTC but also stated that ticket platforms must inform FTC when they detect bots in their systems. This will enable them to block the bots.
“So fans, whether they’re fans of the Grand Ole Opry or Taylor Swift or any of the other ones that are out there, they can get the tickets for the shows that they want,” She said.
Blumenthal even mentioned in the interview and hearing the idea of breaking up the company if necessary. He also noted that if Justice Department finds the company has violated any consent decrees previously, “unwinding the merger ought to be on the table.”
The hearing lasted for almost three hours. More work is expected from the committee and other stakeholders in antitrust protections and consumer protections.
This report was contributed by Reuters
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