Live Nation has urged a New York court to dismiss two elements of the lawsuit filed against it by the US Department Of Justice and a plethora of state-level Attorneys General.
It says that the DoJ’s claim that it created an “unlawful tying arrangement” between its amphitheater venues and concert promotions business is “legally defective”. Meanwhile attempts by the US states to secure damages for their citizens should fail because those citizens haven’t suffered any “discernible injury” from the live giant’s alleged anticompetitive conduct.
“This case will be complicated enough”, Live Nation says in its court filing, going on to add that the judge should dismiss these two elements now so that - as both sides move into the discovery phase - they don’t have to concern themselves with “extraneous claims that fail as a matter of law”.
The DoJ accuses Live Nation and its Ticketmaster subsidiary of exploiting their dominance of the US live entertainment market in ways that violate antitrust law.
Among other things, the government department wants the court to reverse the 2010 merger of the Live Nation concerts and venues business with Ticketmaster. The DoJ approved that deal back in 2010, but subject to a consent decree that restricted how Live Nation and Ticketmaster worked together. It’s alleged that Live Nation’s conduct is in breach of that consent decree.
One allegation in the DoJ’s lawsuit is that Live Nation ties access to the amphitheater venues it operates to the provision of its concert promotion services. Basically, if an artist wants to play one of its venues, they are obliged to work with one of its promoters. The DoJ claims this practice is an unlawful tying arrangement.
Live Nation hit back at that allegation in an earlier court filing, insisting that the DoJ has incorrectly classified that practice as a tying arrangement just so it can claim that Live Nation has violated antitrust law. Not only is that practice not a violation of antitrust law, it is protected by antitrust law, which says that no company has a duty to deal with any other company.
Live Nation now argues that the DoJ’s tying arrangement allegation is so defective, it should be dismissed. The DoJ “implies that Live Nation must allow rival concert promoters to book its amphitheaters”, the new legal filing states. “But Supreme Court precedent squarely forecloses that result. There is no duty to deal with rivals under federal antitrust law, except in the rarest circumstances not alleged here”.
27 of the state Attorneys General are seeking damages on behalf of consumers in their respective states, who they say ended up paying higher ticket prices because of Live Nation’s alleged conduct. In fact, the Attorneys General are exploiting a principle of US antitrust law to push for treble damages. That would mean that Live Nation would have to pay triple whatever sum it was decided consumers had lost as a result of paying over the odds for tickets.
Live Nation wants those claims dismissed on the basis that the DoJ’s allegations of anticompetitive conduct - even if proven - mainly centre on how the different strands of the live sector - artists, venues, promoters and ticket agents - interact and contract with each other. “None of this alleged conduct”, Live Nation states, “occurred in the fan-facing ticketing market, in which ticketers sell tickets to fans”. Therefore consumers were not negatively impacted.
You might argue that Live Nation’s alleged conduct increased costs for other players in the industry, such as non-Live Nation operated venues that did exclusivity deals with Ticketmaster, and that those increased costs impacted on what ticket prices customers ended up paying.
However, Live Nation says it’s not clear that the conduct alleged by the DoJ would result in increased costs for venues. And even if it did - and therefore stopping that conduct would result in savings for venues - it's unlikely those savings would be passed on to the customer
“As a general matter, commercial actors - like venues - seek to maximise their profits”, it writes. And yet, the claims for damages are based on the premise that, “in a world in which their marginal costs went down, venues would respond by gratuitously reducing prices for consumers rather than pocketing the incremental profit”. That is not a sound premise, it argues.
Live Nation’s filing then concludes that its motion for dismissal “should be granted and these claims should be dismissed with prejudice”.