Price Cap on Tickets Would Hurt DOJ’s Case Against Ticketmaster

The Department of Justice and more than 40 state attorneys general filed a civil antitrust lawsuit against Live Nation Entertainment Inc. and its subsidiary Ticketmaster Entertainment LLC last year, alleging the duo wields monopoly power over live event ticketing. The allegations in the complaint were startling, even by antitrust complaint standards.

The government alleged Live Nation-Ticketmaster controls roughly 80% of primary ticketing, charges excessive fees, locks venues into exclusionary contracts, and uses retaliation and threats to keep competitors—especially nascent competitors—out of the market. It also alleged Live Nation used profits from high-margin businesses to subsidize less profitable business lines, creating a flywheel effect.

Live Nation and Ticketmaster deny those allegations, and the case is proceeding apace in federal court in Manhattan.

Last month, Live Nation-Ticketmaster responded to a DOJ and Federal Trade Commission request for comment in response to an executive order directing them to take a host of actions to ensure competition and transparency, with a proposal to cap ticket resale prices.

The DOJ and FTC should be leery of adopting this proposal, which risks trading short-term gains in lower ticket prices for reduced competition and innovation—as well as a weaker antitrust case against the company.

A federally mandated price cap could kneecap Ticketmaster’s secondary-market competitors, who rely on flexible pricing to survive.

Monopoly Ticket

Section 2 of the Sherman Act is the core federal law against monopolization. It prohibits dominant firms from using exclusionary tactics, such as retaliation or restrictive contracts, to maintain their power. The DOJ’s case against Ticketmaster depends on proving exactly that kind of conduct.

The case is interesting because in 2010, the DOJ permitted Ticketmaster and Live Nation to merge. Fourteen years later, one commentator said the case against Live Nation and Ticketmaster “is not a case that presents a ‘close call’” because “consumers, artists, promoters, and venues all have suffered from anticompetitive conduct, and have done so for years,” making it “one of the strongest monopolization cases in the modern era.”

Live Nation-Ticketmaster’s integrated control over ticketing, venues, and promotion presents a modern parallel to some classic antitrust cases.

In United States v. Microsoft Corp., the US Court of Appeals for the DC Circuit held that exclusionary contracts that protect monopoly, rather than competition on the merits, violate Section 2 of the Sherman Act. And the US Supreme Court’s landmark decision in United States v. Paramount Pictures, Inc. ordered the dismantling of a dominant firm’s control over movie production, distribution, and exhibition.

With a seemingly strong case, there seems to be little reason for the government to compromise.

Of course, federal antitrust litigation moves slowly, so even if the case is successful in trial court (and the inevitable years of appeals), concertgoers may not see relief until today’s hottest hits are oldies.

Price Cap Problem

Ticket resale markets are one of the few remaining avenues for competition to chip away at Ticketmaster’s dominance. Independent ticket exchanges, secondary sellers, and technology platforms have emerged precisely because consumers are desperate for ways to purchase tickets, as much of Ticketmaster’s inventory gets purchased by bots or is reserved for presales and non-public sale.

In essence, if resale prices are capped, big incumbents such as Ticketmaster have an advantage due to their sheer scale. With remaining rivals soon squeezed out, Ticketmaster would be left with even greater leverage—the opposite of what the DOJ and the 40 states that are party to this antitrust suit allege is needed to restore competition.

It could muddy the DOJ’s Section 2 theory in its antitrust case against the company by demonstrating that the government has already recognized Live Nation-Ticketmaster’s dominance and has chosen to regulate around it, rather than break it up.

If the DOJ endorses a price cap, Live Nation-Ticketmaster could argue that structural remedies are unnecessary. Defense counsel would likely contend that the government’s own regulatory action amounts to a concession that Ticketmaster’s market power is a given—and that regulation, not antitrust litigation, is the appropriate policy tool.

That narrative would undercut the DOJ’s claim that competition can and should be restored through divestitures or conduct remedies, complicating the task of proving harm and fashioning a meaningful remedy at trial.

Antitrust law has long recognized that regulatory interventions can unintentionally entrench monopolists. In Verizon v. Trinko, the Supreme Court warned that when government-imposed constraints interfere with market dynamics, they may actually “deter or delay” the emergence of true competition.

Similarly, the Supreme Court in Brown Shoe Co. v. United States emphasized that antitrust law protects “competition, not competitors” and that its ultimate goal is preserving a market structure in which rivals can challenge incumbents on the merits. Price caps that eliminate secondary-market players would undermine that principle.

The goal should be to bring competition, innovation, and transparency to the live event industry. That requires letting the antitrust case play out unencumbered, supporting competition in the resale market, and resisting well-intentioned but counterproductive regulatory fixes that inadvertently expand Ticketmaster’s power.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Brian Pandya is partner at Duane Morris and a former Deputy Associate Attorney General in the Trump Department of Justice

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