The Ticketmaster Monopolization Case in Mexico: What we can learn | Legal Case

By Alejandra Palacios¹ & Laura Alicia Méndez²

Ticketmaster presents itself because the world’s largest ticket market and the worldwide chief in dwell occasion ticketing services.³ The firm operates in greater than 30 international locations, together with the U.S. and Mexico. Notably, Ticketmaster has confronted antitrust investigations in each international locations.

Ticketmaster, owned by Live Nation Entertainment — the world’s largest dwell leisure firm — has been the topic of each U.S. and Mexican antitrust investigations. A key concern for regulators in each international locations is that, in addition to vertical integration, practices similar to unique coping with venues could also be reinforcing Ticketmaster’s dominance in the dwell live performance trade. This article outlines the primary points raised by the DOJ’s grievance in opposition to Ticketmaster and compares them with Mexico’s personal abuse of dominance enforcement case of 2015, to discover whether or not there are classes for the previous to be discovered from the latter.

I. Live Nation and Ticketmaster Under U.S. Antitrust Scrutiny

Live Nation Entertainment Inc. (Live Nation), owns or controls greater than 265 live performance venues⁴ throughout the United States, together with over 60 of the highest 100 amphitheatres.⁵ It additionally absolutely owns Ticketmaster LLC (Ticketmaster), the dominant live performance ticketing firm in the U.S. Live Nation’s operations are segmented into three essential areas: (1) Concerts — encompassing promotions, venue administration, and music pageant manufacturing; (2) Ticketing — primarily dealt with via Ticketmaster; and (3) Sponsorship & Advertising. In 2023, the corporate generated world revenues of $18.8 billion from live shows, $2.9 billion from ticketing, and $1.1 billion from sponsorship & promoting.⁶

In May 2024, the U.S. Department of Justice (“DOJ”) filed a lawsuit to interrupt up Live Nation and Ticketmaster, accusing them of monopolizing the dwell live performance trade.⁷ The DOJ claims that Live Nation serves as a “gatekeeper” for the trade, controlling roughly 60 % of the marketplace for live performance promotions, managing over 400 artists, and dominating ticketing companies.

The lawsuit outlines a number of practices that allegedly help Live Nation-Ticketmaster’s monopoly, thereby limiting the entry and enlargement of opponents:

1. By forming collusive partnerships with opponents who subsequently cede live performance promotion area to Live Nation;
2. By threatening venues with the lack of Live Nation-promoted live shows, or by doubtlessly lowering the variety of live shows and transferring exhibits to much less fascinating dates in the event that they go for one other ticketing service;
3. By limiting artists’ entry to venues owned or managed by Live Nation except they comply with use the corporate’s promotional companies; and
4. By buying unbiased promoters perceived as potential opponents, regardless of these acquisitions making little monetary sense.

The case additionally sheds mild on how Ticketmaster and Live Nation management the buying and pricing of tickets,⁸ noting that Ticketmaster’s long-term unique ticketing agreements cowl greater than 75 % of live performance ticket gross sales at main live performance venues.⁹ These agreements are sometimes pre-emptively renewed or prolonged, thereby successfully limiting the first ticketing marketplace for competing ticketers.¹⁰

This lawsuit is a part of the DOJ’s ongoing antitrust considerations in the dwell leisure trade for the reason that 2010 merger between Live Nation and Ticketmaster, which was topic to conduct cures, was approved.¹¹ This merger was anticipated to doubtlessly create a vertically built-in monopoly, involving a ticketer, promoter, and venue proprietor. Consequently, the DOJ required Live Nation to divest sure belongings and license Ticketmaster’s ticketing platform to opponents. The consent decree additionally prohibited Live Nation from retaliating in opposition to venues that opted to work with different ticketing companies.¹²

Following repeated transgressions to such decree, DOJ has moved past continued monitoring of the imposed conduct guidelines to declaring its intention to separate Ticketmaster from Live Nation, successfully searching for to undo the 15-year-old merger.

II. Ticketmaster’s Antitrust Battles in Mexico

Ticketmaster Mexico, formally “Venta de Boletos por Computadora,” operates underneath a co-investment settlement between Ticketmaster and Corporación Interamericana de Entretenimiento (CIE Group) to promote tickets for public occasions and leisure venues in Mexico and all through Latin America. It is the main ticketing firm in the nation, promoting roughly 20 million tickets yearly.¹³ Much like Live Nation in the U.S., CIE Group is a serious participant in Latin America’s “out-of-home entertainment industry.” It engages in live performance promotion, venue administration (together with 13 premier venues throughout Mexico), ticket gross sales, and likewise manages and commercializes inventive expertise. As a part of Grupo CIE, the corporate contains subsidiaries similar to OCESA Entretenimiento, which specializes in dwell present promotion, and Operadora de Centros de Espectáculos, which manages occasion venues. Beyond Ticketmaster, CIE additionally owns ETK Boletos, one other ticketing firm that operates underneath the model “E-Ticket,” focusing on smaller and native occasions. Together, these firms provide a complete vary of companies inside the dwell leisure trade.¹⁴

In 2015, 9 years earlier than the U.S. DOJ’s grievance in opposition to Live Nation-Ticketmaster, COFECE, the Mexican antitrust company, launched an investigation in opposition to Grupo CIE and its subsidiary, Ticketmaster Mexico, for unique dealing in the marketplace for “live show production and promotion; the operation and management of live event venues; and the automated distribution and sale of tickets.”¹⁵

As in the U.S., venue house owners in Mexico can both function the power themselves or rent a administration firm to take action,¹⁶ and promoters play an important position in the dwell present trade by serving to artists ebook the venue, rent the tech crew, promote tickets, and publicize exhibits.¹⁷

During the investigation, COFECE’s prosecutor discovered proof of exclusivity agreements between present venues and/or occasion promoters and Ticketmaster, together with different clauses that would reinforce such dealings, doubtlessly dominating the ticketing market.¹⁸ At that second, CIE owned or managed most of the nation’s most necessary occasion venues, together with Foro Sol, Palacio de los Deportes, Autodromo “Hermanos Rodríguez” and Auditorio Citibanamex (Nuevo León).¹⁹ However, COFECE didn't discover sufficient proof of abusive conducts in the live performance promotion market.

To settle the case, in 2018, Grupo CIE agreed to a number of remedial measures: (a) eliminating all unique dealing clauses from contracts with occasion promoters and venue operators; (b) refraining from together with such unique dealing clauses for the subsequent 10 years, and (c) not rising its administration portfolio of third-party venues with a capability over 15,000 individuals in Mexico City for the subsequent 5 years. In its decision, COFECE emphasised the significance of stopping exclusivity agreements from being changed with mechanisms that would have related anticompetitive results. Consequently, it denied CIE’s proposal to supply reductions and integral companies as an alternative of unique agreements. The company requested that CIE (Ticketmaster) report future incentive schemes to make sure ongoing monitoring of those actions, acknowledging that such practices may have an effect on market competitors.

It is necessary to notice that these cures primarily addressed COFECE’s considerations about potential abuse of dominance by Ticketmaster in ticketing companies for dwell exhibits via unique dealing agreements. In that second, CIE was nonetheless competing with Live Nation in the promotion market and their partnership was restricted to the ticketing trade. Unlike the U.S. monopolization case, the Mexican antitrust authority didn't assess CIE’s potential market energy in dwell present promotion nor launched measures to curb potential abuse of such energy.

One 12 months after the settlement, in 2019, COFECE approved Live Nation to amass a 51 % controlling curiosity in CIE’s belongings,²⁰ with out imposing remedial measures. Initial considerations that Live Nation may use its affect to channel nationwide occasions via CIE’s selling arm, OCESA, doubtlessly excluding different promoters, had been alleviated by proof exhibiting that artists typically negotiate with numerous worldwide promoters. At that point, solely a small proportion of worldwide artists who had carried out in high-capacity amphitheaters in Mexico had been related to Live Nation.

COFECE’s newest motion in opposition to CIE Group, Ticketmaster’s Mexico holding firm, got here in 2021 when the regulator imposed a 54,000 USD tremendous on it for not absolutely complying with the 2018 settlement decision. This tremendous was as a result of failure to incorporate non-exclusive dealing provisions in 25 ticketing companies agreements.²¹

III. Will Antitrust Cases Drive Greater Competition?

Antitrust enforcement goals to foster aggressive markets, finally benefiting shoppers by decreasing costs, enhancing high quality, and selling innovation. The main concern with anti-competitive habits is usually the resultant excessive costs.

A. Is Ticketmaster’s Dominance Raising Prices in the Concert Industry?

Ticket costs comprise the face worth value and extra charges and taxes.²² The face worth refers back to the value of the ticket earlier than service charges and taxes are added, and as such covers promotion prices and venue rent. Additional charges could embrace a service charge, an order processing charge, and a supply charge.

According to the DOJ, dismantling the Ticketmaster-Live Nation monopoly may result in decrease costs for shoppers. Over current years, Live Nation has elevated the live performance promotion charges it imposes on venues, which have been straight handed on to shoppers via ticket pricing.²³

The DOJ’s lawsuit highlights that artists have had fewer alternatives to carry out, with restricted viable choices for selling their live shows, promoting tickets on their very own, or selecting efficiency venues.²⁴ Given Live Nation’s intensive community of venues, which is basically solely made accesible to artists that the corporate promotes, it's tough for artists to work with different promoters in the event that they need to carry out in a Live Nation-owned or managed venue.²⁵ Additionally, the venues themselves are sometimes hesitant to problem the established order as a result of monetary dangers, dealing with restricted decisions for acquiring live shows and ticketing companies.²⁶ Given Live Nation’s monopoly energy in live performance bookings and promotional companies for main venues in the United States, it can extract supra aggressive funds from venues, together with onerous, restrictive contractual phrases in alternate for offering them with content material.²⁷

With Ticketmaster dealing with no vital competitors in the ticketing marketplace for dwell occasions, last ticketing costs absolutely replicate these elevated charges, together with different further service charges. In phrases of further charges, DOJ believes followers have paid extra due to a scarcity of transparency, objects that aren't negotiable, and non-existent comparison-shopping as a result of there are merely no different choices.²⁸

Conversely, Live Nation argues that even when the lawsuit succeeds, it gained’t result in cheaper ticket costs, claiming that the DOJ “ignores the basic economics of live entertainment.”²⁹ According to Ticketmaster, “artists, promoters, sports leagues, or teams decide how they want to sell their tickets on Ticketmaster’s marketplace. That includes setting the face value prices, determining how many tickets to sell, and when to put them on sale.”³⁰ If the face values of tickets are usually set or accredited by artists, and Ticketmaster doesn’t maintain any portion of the face worth value of a ticket,³¹ how can or not it's blamed for prime ticket costs?³² Regarding further charges, Live Nation contends that charges on Ticketmaster are akin to these on different main ticketing websites, and even decrease,³³ and are decided and shared between the events concerned in making the dwell occasion occur.³⁴

In the Mexican antitrust case in opposition to Ticketmaster, there was no ex put up analysis of enforcement intervention to find out its impact on ticket costs, although it's protected to imagine they didn't lower.

A big issue in each the Mexican and U.S. instances is vertical integration. In Mexico, Ticketmaster’s intra-group relationships with CIE, the most important promoter and venue supervisor in Latin America, performed a pivotal position. However, in the Mexican antitrust case, CIE’s market dominance in venue administration and occasion promotion was not totally examined. As talked about, the remedial measures imposed on the time solely handled exclusivities between venues and/or occasion promoters and Ticketmaster. In distinction, in the DOJ case, the live performance promotion enterprise is central as Live Nation leverages its market energy in live performance promotion over the ticketing market.

According to the DOJ, the unique dealing agreements between Ticketmaster and venues are a part of a broader sample of retaliation and different exclusionary practices that maintain Live Nation’s income cycle, which the corporate refers to as its “flywheel.”³⁵ Given that the dearth of competitors stems from structural issues (i.e. vertical integration), the DOJ is searching for a structural answer: the breakup of Live Nation and Ticketmaster.

B. Is Ticketmaster’s Dominance Stifling Innovation?

Ticketmaster claims that its service charges are allotted to safety expertise, web sites and apps, fee supplier prices, staffing, and ticket scanners.³⁶ However, the DOJ argues that Live Nation and Ticketmaster’s anti-competitive behaviors have prevented followers from experiencing the advantages of a aggressive market, together with progressive and fan-friendly ticketing choices.³⁷ Either approach, Ticketmaster has confronted quite a few complaints in each the U.S. and Mexico, centered round allegations of unfair industrial practices and information safety points.

In the U.S., one notable incident involving Ticketmaster occurred through the sale of tickets for Taylor Swift’s Eras Tour, the place the location crashed as a result of an awesome variety of prospects trying to buy tickets. This led to a 2023 U.S. Senate Judiciary Committee listening to to analyze the matter.³⁸ During the listening to, legislators expressed their considerations relating to Ticketmaster’s market energy and its results on shoppers, and mentioned potential cures, together with the break-up of Live Nation-Ticketmaster.³⁹

Later in July of this 12 months, Ticketmaster reported a major hacking incident that compromised its North American buyer database. The firm alerted prospects to the potential threat of id theft and fraud, confirming that hackers had accessed names and primary contact particulars.⁴⁰ The breach additionally included encrypted bank card data, although the specifics of the info obtained weren't absolutely disclosed.

In Mexico, Ticketmaster has been concerned in controversies regarding unfair industrial practices. A current case ended in April when Ticketmaster settled a class-action lawsuit initiated by the Federal Consumer Protection Bureau (PROFECO) as a result of occasion cancellations between 2020 and 2023. The lawsuit originated from a 2022 Bad Bunny live performance at Estadio Azteca, the place followers skilled issues in accessing the venue as a result of duplicated tickets offered via Ticketmaster, in addition to a number of complaints obtained by PROFECO relating to unilateral ticket cancellations, non-compliance with initially supplied circumstances, and refusals to refund the complete ticket price together with service costs.⁴¹

As a end result, Ticketmaster refunded over 3.4 million pesos to roughly 500 shoppers affected by these cancellations. In response to those challenges, Ticketmaster launched the “Ticketmaster MX” app and the digital ticket SafeTix, to boost ticket buy safety and to fight forgery, duplication, and unauthorized resale.⁴²

Therefore, it appears that there's room for enchancment in customer support and innovation inside the ticketing trade. So far, Ticketmaster’s efforts appear to focus extra on addressing previous challenges quite than being disruptive or really enhancing the fan expertise. In our view, a aggressive and dynamic dwell live performance trade ought to prioritize not solely strengthening safety to forestall ticket counterfeiting but in addition making certain sturdy information safety, truthful phrases—similar to versatile refund insurance policies—and clear pricing practices. On this final level, it's value noting that in September of this 12 months, the Competition and Markets Authority (CMA) in the United Kingdom launched an investigation into Ticketmaster over its dynamic pricing of live performance tickets.⁴³

IV. Conclusion

The U.S. DOJ’s, UK’s CMA, and Mexico COFECE’s instances in opposition to Ticketmaster stem from a sequence of considerations about competitors and unfair practices in the dwell live performance trade.

As talked about, in Mexico, Ticketmaster has already confronted antitrust scrutiny, primarily as a result of unique dealing agreements between Ticketmaster and venues or promoters. This case was settled by ending these unique offers and limiting Ticketmaster’s mum or dad firm, CIE, from working further venues in Mexico City. While no ex put up competitors evaluation has been performed, it's probably that the Mexican ticketing trade has not seen vital adjustments for the reason that settlement. Recent improvements in ticketing have been pushed extra by considerations about unfair shopper practices.

Unlike the Mexican case, the DOJ’s problem goes past unique dealing practices, focusing on vertical integration itself. The DOJ argues that Live Nation, proprietor of Ticketmaster, capabilities as a “gatekeeper” for the complete dwell leisure trade, wielding monopoly energy over ticketing, artist promotion, and venue possession. The DOJ additionally raises considerations about tying practices between a venue’s use and promotion companies.

If profitable, the DOJ’s case ought to have a extra vital influence on the dwell live performance trade than the Mexican settlement. The concern is that Live Nation’s vertical integration permits it to leverage its dominance throughout a number of markets. Therefore, breaking apart Live Nation and Ticketmaster may may restrict the corporate’s skill to exert such management throughout the trade.

However, the case remains to be underneath judicial overview, and Live Nation is predicted to current proof of the efficiencies of its enterprise mannequin. What is obvious is that this case will proceed to draw widespread public curiosity and stay in the highlight for the approaching months.

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1 Antitrust Expert. Former Chair at COFECE, 2014 – 2021.

2 LLM in Competition Law. Antitrust Expert. Former Director General of Unilateral Conduct at COFECE, 2017-2019.

3 Press launch. TikTookay & Ticketmaster Expand Partnership Across 20+ Countries to Help Artists Sell Tickets to Fans Directly in the App. https://business.ticketmaster.com/press-release/tiktok-and-ticketmaster-expand-partnership-across-20-countries-to-help-artists-sell-tickets-to-fans-directly-in-the-app/.

4 “Venue” is the location the place an occasion or live performance is held.

5 Justice Department Sues Live Nation-Ticketmaster for Monopolizing Markets Across the Live Concert Industry (23 May,2024) https://www.justice.gov/opa/pr/justice-department-sues-live-nation-ticketmaster-monopolizing-markets-across-live-concert.

5 DOJ Complaint in opposition to Ticketmaster, p.9. https://www.justice.gov/atr/media/1353101/dl.

7 Justice Department Sues Live Nation-Ticketmaster for Monopolizing Markets Across the Live Concert Industry (23 May,2024) https://www.justice.gov/opa/pr/justice-department-sues-live-nation-ticketmaster-monopolizing-markets-across-live-concert.

8 Idem.

9 DOJ Complaint in opposition to Ticketmaster, p.40.

10 DOJ Complaint in opposition to Ticketmaster, p. 41.

11 DOJ Seeks an Encore Showdown with Live Nation and Ticketmaster (28 May, 2024) https://www.wsgr.com/en/insights/doj-seeks-an-encore-showdown-with-live-nation-and-ticketmaster.html.

12 Idem.

13 Live Nation Closes Acquisition Of OCESA, The Third Largest Promoter Globally and Leading Live Entertainment Company in Mexico, Further Growing Business In Latin America. https://www.livenationentertainment.com/2021/12/live-nation-closes-acquisition-of-ocesa-the-third-largest-promoter-globally-and-leading-live-entertainment-company-in-mexico-further-growing-business-in-latin-america/.

14 https://www.ocesa.com.mx/nosotros.

15 https://www.cofece.mx/cofece/images/AI/IO-005-2015_Extracto_acuerdo_inicio_13052016.pdf.

16 DOJ Complaint in opposition to Ticketmaster, p.12

17The Live Music Sector. https://cmulibrary.com/livemusic/.

18 Resolución IO-005-2015. COFECE.

19 Idem.

20 CIE. Declaración de Información sobre Reestructuración Societaria de fecha 6 de septiembre de 2019, https://www.bmv.com.mx/docs-pub/reescorp/reescorp_951114_1.pdf.

21 Incidente de cumplimiento y ejecución Expediente COMP-004-2018-1. 5519460.pdf (cofece.mx).

22 https://help.ticketmaster.com/hc/en-us/articles/9663528775313-How-are-ticket-prices-and-fees-determined.

23 DOJ Complaint in opposition to Ticketmaster, p.18.

24 Idem, p.54.

25 Idem, p.72.

26 Idem, p.54.

27 Idem, p. 71.

28 Idem, p.54.

29 What the most important Ticketmaster lawsuit means for you, (May 23, 2024) https://edition.cnn.com/2024/05/23/tech/what-the-ticketmaster-lawsuit-means-for-you/index.html.

30 https://help.ticketmaster.com/hc/en-us/articles/9663528775313-How-are-ticket-prices-and-fees-determined.

31 https://help.ticketmaster.com/hc/en-us/articles/9663528775313-How-are-ticket-prices-and-fees-determined.

32Update: Breaking Down The DOJ Lawsuit, https://www.livenationentertainment.com/2024/05/update-breaking-down-the-doj-lawsuit/.

33 Idem.

34 https://help.ticketmaster.com/hc/en-us/articles/9663528775313-How-are-ticket-prices-and-fees-determined.

35 DOJ Complaint in opposition to Ticketmaster, p.27.

36 https://www.livenationentertainment.com/2024/05/update-breaking-down-the-doj-lawsuit/.

37 DOJ Complaint in opposition to Ticketmaster, p.54.

38 S. Hrg. 118-31 – That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment (January 24, 2024). https://www.judiciary.senate.gov/committee-activity/hearings/thats-the-ticket-promoting-competition-and-protecting-consumers-in-live-entertainment, https://www.govinfo.gov/app/details/CHRG-118shrg52250/CHRG-118shrg52250.

39 Senate Hearing on Ticketmaster Hearing Takeaways: After Taylor Swift Debacle, Some Senators Call Live Nation a ‘Monopoly’ (January 24, 2024) https://www.nytimes.com/live/2023/01/24/arts/ticketmaster-taylor-swift.

40 Ticketmaster warns prospects to take motion after hack (July 9, 2024) https://www.bbc.com/news/articles/c729e3qr48qo.

41 Juez admite demanda colectiva contra Ticketmaster y Ocesa: Profeco (28 April, 2023) https://aristeguinoticias.com/2804/mexico/juez-admite-demanda-colectiva-contra-ticketmaster-y-ocesa-profeco/.

42 Profeco y Ticketmaster ponen fin a demanda de Acción Colectiva (24 April, 2024) https://www.gob.mx/profeco/prensa/profeco-y-ticketmaster-ponen-fin-a-demanda-de-accion-colectiva.

43 Adam Brown, Don’t Log Out in Anger: Dynamic Pricing of Oasis Tickets as an Exploitative Abuse?, (September 6, 2024). https://competitionlawblog.kluwercompetitionlaw.com/2024/09/06/dont-log-out-in-anger-dynamic-pricing-of-oasis-tickets-as-an-exploitative-abuse/.