Live Nation, the live music industry giant that owns Ticketmaster, is facing scrutiny over allegations of anticompetitive behavior. Several law firms are investigating whether Live Nation misled its investors by failing to disclose the extent of its legal vulnerability in the face of antitrust violations.
One law firm, Bernstein Liebhard, has sent out a notice soliciting investors to join a class-action lawsuit filed against Live Nation in California federal court. The lawsuit accuses the company of lying to investors about its allegedly anticompetitive practices, including charging excessive fees, bundling services, and retaliating against venues that choose a ticketing service other than Ticketmaster.
The investigation into Live Nation’s behavior began last year when the Department of Justice opened an antitrust investigation into the company after Ticketmaster’s systems crashed during a highly-anticipated presale for Taylor Swift tickets. The incident drew attention to Live Nation’s dominant position in the live music industry.
The stock price of Live Nation plummeted nearly eight percent on the day the news broke, and another eight percent last month upon reports that the Department of Justice was considering filing an antitrust suit against the company. Investors claim that Live Nation made false or misleading statements about its business practices regarding antitrust scrutiny. The company stated that it did not engage in behaviors that could justify antitrust litigation and that there was robust competition in the industry. However, investors argue that Live Nation failed to disclose its legal vulnerability and the potential fines, penalties, and reputational harm it could face.
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If the Department of Justice decides to sue Live Nation, it would not be the first time the company faces competition enforcers. In 2019, the agency found that Live Nation was violating the terms of a settlement from its 2010 merger with Ticketmaster. The company was accused of forcing venues to accept Ticketmaster’s ticketing services and retaliating against those that refused. As a result, Live Nation agreed to an amended deal that allowed monitoring for further breaches and imposed a $1 million fine for violations.
The lawsuit also names the company’s CEO, Michael Rapino, and CFO, Joe Berchtold, alleging violations of the Securities Exchange Act. To succeed, the investors will need to prove that the statements made by Live Nation were false or misleading and that the officers knew they were making false statements.
The merger between Ticketmaster and Live Nation in 2009 was approved by antitrust regulators under certain conditions. Ticketmaster was required to sell its ticketing service subsidiary, Paciolan, and license its ticketing software to Live Nation’s competitor, AEG. The new company was also prohibited from bundling services or retaliating against venues for working with other ticketing services.
Live Nation has not yet responded to requests for comment on the investigations and the lawsuit.
As the investigations unfold, Live Nation will have to address the allegations of anticompetitive behavior and defend itself against the claims made by investors in the class-action lawsuit. The outcome of these legal proceedings could have significant implications for the company and the future of the live music industry.
