The Justice Department, in what it described as its strongest enforcement of an antitrust agreement in 20 years, said Thursday that it and Live Nation Entertainment had agreed to amend and extend the regulatory decree that allowed the giant concert company to merge with Ticketmaster nearly a decade ago.
Justice officials said the settlement came after the department found that Live Nation had repeatedly violated the existing agreement. Its investigation focused on complaints from competitors that Live Nation had used its control over the concert touring business to pressure music venues into signing contracts with its Ticketmaster subsidiary.
Such behavior, the Justice officials said, violated the terms of the consent decree that the government imposed as a condition of the merger in 2010 — a deal that created a colossus in the live entertainment business and has long been criticized for giving the company too much power.
Under a proposed amended agreement that the government said it would file in federal court in Washington, the decree, set to expire in July, would be extended to the end of 2025. Live Nation would also reimburse the Justice Department for its costs in enforcing the regulations but would not be fined.
“Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010,” said Makan Delrahim, the assistant attorney general who leads the Justice Department’s antitrust division. “Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer.”
In its statement, Live Nation said: “We have reached an agreement in principle with the Department of Justice to extend and clarify the consent decree. We believe this is the best outcome for our business, clients and shareholders as we turn our focus to 2020 initiatives.”
The adjusted decree would clarify one of its most contested provisions — how Live Nation should conduct itself in the marketplace when it is selling its ticketing services and deciding where its artists should tour.
Under the existing agreement, Live Nation is forbidden from using the might of its concert-promotion division — which puts on tours by stars like Beyoncé and U2 — to coerce venues into signing exclusive deals to use Ticketmaster, which holds the contracts at roughly 80% of major music venues.
But the decree also allows the company to “bundle” its services and gives Live Nation the right to exercise “its own business judgment” in making deals — terms that some antitrust experts believe made the decree ambiguous and difficult to enforce.
The revised decree would be designed to make clearer the restriction that Live Nation is not allowed to threaten venues in any way and may not retaliate against venues that decide to use a system other than Ticketmaster.
The Justice Department said it would appoint an independent monitor to investigate and report on Live Nation’s behavior, and the company agreed to name an internal antitrust compliance officer. In the future, Live Nation will pay an “automatic penalty” of $1 million for any violation of the agreement, the government said.
Live Nation has long denied violating the decree, saying that it had not threatened venues and faces a vigorous field of competition in ticketing. The company did not admit to any wrongdoing as part of the new agreement.
In a court filing, Justice officials said they had identified “numerous instances” where Live Nation threatened venues with making concerts a condition of a ticketing deal, and other instances in which Live Nation “retaliated against venues by withholding live entertainment events because the venue chose not to contract with Ticketmaster.” The filing did not specify locations.
But competitors had complained to investigators about several incidents over the years in Louisville, Kentucky; Oakland, California; Los Angeles, and other cities, where they said Live Nation had used its power over concert tours by major stars to strong-arm venues into using Ticketmaster.
In the incident in Louisville, in 2014, managers of the KFC Yum! Center, a 22,000-seat arena, were considering replacing Ticketmaster with a system run by Live Nation’s biggest rival, AEG. But officials at AEG told The New York Times last year that they had received a warning from a Live Nation executive, saying the Louisville arena was likely to lose concerts if it dropped Ticketmaster.
Live Nation disputed the account and supplied data showing that since 2012, the number of tours it has sent to the KFC Yum! Center has increased.
On Wall Street, where Live Nation has been a meteoric stock in recent years, the reaction to the proposed settlement was largely positive. Analysts called the government action relatively mild and said the settlement had removed a cloud of uncertainty that had been hanging over Live Nation.
The company’s stock price rose more than 9% after the settlement was announced, closing at $69.83.
“This is a positive outcome,” said John Tinker, a media analyst at Gabelli & Co. “The clarifications seem relatively modest and reasonable.”
Response in the music industry was more muted. Independent concert promoters, who vigorously opposed the merger and have complained about the company’s dominance since, said they doubted the new decree would make a difference.
“It will have no effect and will allow them to continue their monopoly position at the expense of the consumer and competitors,” said Jerry Mickelson, of JAM Productions in Chicago.
As concert ticket prices have skyrocketed in recent years, lawmakers and federal agencies have scrutinized the market, concerned about fairness toward consumers and toward competitors. Those efforts have intensified over the last few months.
The settlement comes four months after Sens. Richard Blumenthal of Connecticut and Amy Klobuchar of Minnesota asked Delrahim to investigate competition in ticketing, pointing specifically to Live Nation and asking that the decree be extended. In their request, they cited an investigation by The Times last year that discussed the incidents in several cities where Live Nation’s competitors had complained to the government that its business practices had effectively stifled competition.
This month, members of the House Judiciary subcommittee on antitrust wrote to Delrahim with similar concerns, asking him to “take all necessary action to protect consumers and enhance competition.”
A Justice Department official, who asked not to be named because of the sensitive nature of the investigation, said Delrahim had become similarly concerned that the merger had harmed rivals, led to higher ticket prices for events and hampered innovation.
Justice officials in the Trump era have been unusually aggressive toward mergers of companies that are not direct competitors but operate in adjacent business lines, as Live Nation and Ticketmaster once did. For decades, such deals, known as vertical mergers, had been largely approved by the Justice Department because it is difficult to prove a reduction in competition or harms to consumers with such mergers.
But Delrahim shocked corporate America in 2017 by moving to block AT&T’s merger with Time Warner, the first major challenge of a vertical merger in three decades. The government later lost the case in court.