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Ticketmaster pays $10 million fine over Crowdsurge server hacking
By Chris Cooke | Published on Friday 1 January 2021
Live Nation’s Ticketmaster agreed to pay a $10 million fine earlier this week to avoid prosecution under the US Computer Fraud And Abuse Act. The fine relates to Ticketmaster staff illegally logging onto the servers of former rival ticketing business Crowdsurge back in 2013 and 2014.
That conduct first came to light after Crowdsurge – which had by then merged with Songkick – sued Live Nation in 2015 accusing its much larger rival of anti-competitive behaviour.
As that case went through the motions, Songkick’s lawsuit was streamlined and extended, including the addition of specific allegations of misconduct against certain Ticketmaster staff members.
Those allegations centred on Stephen Mead, a former Crowdsurge employee who had subsequently joined Ticketmaster, and Zeeshan Zaidi, another executive at the Live Nation company.
It was alleged that Zaidi had encouraged Mead to use his knowledge of his former employee’s systems to hack into its servers to get confidential information about its products, and in particular its work developing pre-sale and anti-touting ticketing services.
The civil lawsuit was ultimately settled in 2018 in a deal reportedly worth $110 million. By that time the Songkick gig recommendations platform had already been sold off to Warner Music, whose owner Access Industries was an investor in the Songkick/Crowdsurge business.
The more conventional ticketing side of that company had then been wound down, so that the legal battle with Live Nation was pretty much all that was left. Although there were some other assets which were then acquired by Live Nation as part of the $110 million deal.
However, while the lawsuit may have been settled, that didn’t stop federal prosecutors from investigating the hacking allegations that had been made against Ticketmaster and its employees. It’s that investigation that led to this week’s settlement.
According to Variety, in addition to paying the fine, Ticketmaster has also agreed to introduce a “compliance and ethics programme designed to prevent and detect violations” of computer-hacking laws as well as to prevent the “unauthorised and unlawful acquisition of confidential information belonging to competitors”.
Commenting on its settlement with federal prosecutors, Ticketmaster said that it was pleased the matter had been resolved, stressing that the employees involved in the Crowdsurge hacking had been fired back when their activities first came to light. A spokesperson added: “Their actions violated our corporate policies and were inconsistent with our values”.
