To put it mildly, last month’s Taylor Swift ticketing debacle has placed a renewed focus on Ticketmaster’s market dominance. A chaotic pre-sale and ensuing cancellation of the general on-sale for the singer’s “Eras Tour” have raised issues as to whether the company wields its power in a manner detrimental to the public interest.
On November 16, Senator Amy Klobuchar (D-Minn.), who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, sent an open letter to Michael Rapino, president-CEO of Ticketmaster parent Live Nation, in which she raised a series of pointed questions about the company’s businesses practices, prompted by her “serious concerns about the state of competition in the ticketing industry and its harmful impact on consumers.”
The following week, Klobuchar and Ranking Member Mike Lee (R-UT) announced that the subcommittee will hold a hearing “to examine the lack of competition in the ticketing industry.” She later added via Twitter, “This goes way beyond Taylor Swift. This is about a monopoly that can charge higher prices, hide fees, and fail to give quality service because it doesn’t need to. I am holding a bipartisan hearing with Senator Lee because when there is no competition, Americans pay the price.”
Klobuchar has long expressed reservations about the consequences of the 2010 Live Nation-Ticketmaster merger. She took an active role during the subcommittee’s February 2009 hearing on the then-proposed deal. In her opening statement, she queried whether permitting the two companies to join forces would mean that “anti-consumer practices will go unchecked and unaddressed to the detriment of consumers [and] concert-goers.”
In last week’s letter to Rapino, Klobuchar referenced that earlier hearing, noting, “you appeared as a witness and pledged to ‘develop an easy-access, one-stop platform that can deliver … tickets.’ And you said that you were ‘confident this plan will work.’ It appears that your confidence was misplaced.”
Although the Department of Justice eventually approved the merger, it did so in conjunction with a consent decree that sought to limit the company’s ability to abuse its market position. Ten years later, the DOJ agreed to extend the decree through 2025, with some modifications, reflecting its position that Live Nation and Ticketmaster, “have repeatedly conditioned and threatened to condition Live Nation’s provision of live concerts on a venue’s purchase of Ticketmaster ticketing services, and they have retaliated against venues that opted to use competing ticketing services – all in violation of the plain language of the decree.”
In her recent book, “Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age,” Klobuchar describes the passage of Save Our Stages, the $15 billion relief bill she co-authored with Senator John Cornyn (R-TX) to aid independent live music venues affected by affected by COVID-19. She underscores that the legislation “specifically targeted help to the smaller venues and excluded the behemoth Ticketmaster.”
While the date and details of the hearing have yet to be announced, Klobuchar spoke with Variety to share her views on the climate for antitrust enforcement, possible ticketing legislation and why Swifties are like Grangers.
Last month you asked Michael Rapino a series of questions about Ticketmaster’s current practices. Have you received any answers?
We have received some answers, which we’re glad about. We’ve also told them that we needed some follow-ups. So we’re working with them on those.
As they’ve said publicly, they should have done better on the Taylor Swift ticket sales. We know that, but we believe it’s not enough. I believe that we need to get to the bottom of the problems in the ticketing industry. That’s part of why we’re holding a hearing.
I look at the hearing as dual purpose: first, to get information, since the Justice Department is doing a major investigation on Ticketmaster in general, everything from their vertical integration with owning Live Nation and owning the arenas to ticket prices. We don’t know what they’re investigating. We know the consent decree pertained to violations of telling people they had to use Ticketmaster, but we don’t know if that’s what the investigation is.
Hearings can be helpful because you get information and the witnesses are under oath and that informs investigations. So that’s the first thing. The second thing is that it informs us.
As I’m looking at solutions here, it’s also important to get the resources that we need to our antitrust enforcers, who are now shadows of the former selves. We have a bill to change the merger fees [The Merger Filing Fee Modernization Act https://www.congress.gov/bill/117th-congress/house-bill/3843%5D that would add over $100 million to our agencies. It’s passed through House and I’m hoping to get it done.
I’m looking to rejuvenate our antitrust laws in general. One of the things that you could do on both discriminatory conduct and mergers is make it easier to prove up on major mergers or major monopolies — putting the burden on the companies to show things are not anti-competitive, as opposed to putting it all on the government.
Meanwhile, something else that’s very important is specific legislation about transparency in ticket sales. We’re working on bipartisan legislation on that with some basic disclosures and some common-sense rules. I’m working on that with a number of other senators and it’s specific to the ticketing industry.
The DOJ has already had two opportunities to step in and declare that the union of Live Nation and Ticketmaster has created a vertical monopoly that fosters an anticompetitive environment — particularly since the merged company owns and operates venues, while also managing artists. Do you think DOJ got it wrong both times, or do you think something has changed that merits another look?
It could be both. Clearly, they got something wrong because of where we are today — there’s no doubt about it. Whether it was a lack of enforcement of the one particular consent decree or whether they just should not have allowed the merger, there were big problems. I asked about it at the time during the hearing.
But secondly, we know that we’ve seen violations. In 2019, the Justice Department went to court, got the consent decree extended, appointed an independent monitor and put in place penalties that could be doled out.
I think the other thing is that people are starting to see the effects of these monopolies. Who would have guessed that Taylor Swift fans would be advocating for changes to antitrust laws? They’re the modern-day Grangers [the 19th century farmers movement pushing back against monopolies], and they are doing this on the internet.
We need this kind of movement. You’re starting to see this everywhere from cat food to caskets, in the tech markets and pharmaceuticals. There’s been a lot of consolidation and that’s why there has been some pushback from the Justice Department and the FTC.
I think about AT&T, where not only did they have horizontal integration with all the phone companies, but also vertical integration by owning all the hardware. When that got broken up, we saw so much more innovation in the cellphone market, and we saw long-distance prices go down. So that kind of unwinding has been happening in the past with major industries.
You may well the first person to compare Swifties to Grangers.
Oh, I’m just trying to interest your readers with a modern take. (Laughter.)
I think it’s completely relevant, though. Looking back through history, the way this happened was you had presidential candidates like Woodrow Wilson with songs about antitrust because the two major parties were trying to outdo each other to demonstrate that they could get something done.
That’s because the Populists, the farmers unions, you name it, were coming forward against these trusts because of the same thing — prices, a lack of competition for their goods and how they got goods to market. There were snafus and problems with transactions. Back then it was rail lines and things like that — now it’s the internet.
It took a while to get us there, though. Back when the Senate wasn’t elected, the members were often chosen by the trusts, who could sit there like in that old cartoon, peering over the Senate and everyone behaved for them. [Direct election of senators became mandatory following the passage of the 17th Amendment in 1913.] Eventually, the situation with the trusts got so out of hand that the population got mad.
Then in the Progressive Era everyone started trying to out-compete each other, including Republicans, to figure out how they could get things done. That’s the era we have to reach again in the modern day. I don’t think we should be surprised that it doesn’t happen overnight, but we need people to come forward.
Not everyone realizes that Ticketmaster’s clients are not the concertgoers — they’re the venues. Do you think this has hampered some prior attempts at regulation because everything is complicated by self-interest and self-protection?
What happens with monopolies is the the people who get hurt by them also are afraid of them. They don’t want to come forward because they think they’re going to get screwed. I’ve had countless companies coming up to me and meeting with our staff about App store problems and tech problems. Some of these are major companies who are afraid to come out publicly because they think they’re going to get punished.
I think Stephen Colbert probably pointed it out the best when I was on his show talking about the book. I was going on and on about some of these issues with Google and tech companies. Then as I’m complaining, he gets this funny look on his face, pauses, looks at the screen and professes his love for Google.
What he was saying was “Please don’t mess with me.” He was doing it in a funny way because that’s how people think.
It’s one of the problems for the venues. If they get over their skis and they come out and complain, they could get permanently screwed. Retaliation was one of the issues that came up with the consent decree.
I would imagine you heard a fair number of stories in the process of working on Save Our Stages. On a more positive note, can you share a memorable moment looking back on the process of securing that legislation?
I took on Save Our Stages with Senator John Cornyn [R] of Texas — thank God for country [music]. We combined forces after I heard from Dayna Frank in my state, who heads up the National Independent Venue Association and owns First Avenue. We all realized that these [independent] venues were the first to close and they were going be the last to open because you can’t stand in a mosh pit in the middle of a pandemic, much less an orchestra pit.
So we got a coalition together. It was all very positive, based on people’s small theaters. The Fargo Theater in North Dakota got Kevin Cramer on the bill, who’s a conservative Republican. Mitch McConnell got on the bill. Then were able to get the coalition together and ended up passing a bill that included the biggest investments in the arts in the history of America — $16 billion! It kept so many venues afloat.
As a result, one of my most favorite moments in my career as a senator is I got a star on the wall at First Avenue — right next to Alice Cooper and five away from Prince. The problem is they were painting it in the middle of a blizzard to celebrate the moment the bill passed, and the ink froze. So it only said “Amy” for four months. [Laughter] But it was fun finally being able to go back to venues, from the Children’s Theater to the Chanhassen Dinner Theatre.
I think the heartwarming part of this was during the pandemic people realized how much they missed live performances, whether it was going to a bar and hearing a little band or attending a play. While they were missing it, they watched artists struggling — playing in their basement or on their front steps or an orchestra trying to play by Zoom in little boxes.
While it was cool and some of the big artists were able to do it well, it wasn’t the same. It made people miss music and gathering together. That’s why it was so exciting to pass that bill and it’s also why I remain focused on all of this.
Read More About:
Source: Read Full Article