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Updates on tomorrow's Live Nation/Ticketmaster hearing

The session actually is before the Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights, so it is perhaps incorrect to say it's the first step toward the Justice Department deciding whether or not this merger will go through. (That was language I picked up from a concert industry trade publication in my earlier post.)

As for the stance that David A. Balto of the Center for American Progress Action Fund has on the merger, well, following the jump is an advance look at the testimony he will offer tomorrow on Capitol Hill. Bottom line: The group not only is strongly opposed, it's urging the Department of Justice to reopen the Ticketmaster investigation it abandoned in the mid-'90s.

AND: Also set to appear before the committee--and also presumably opposing the merger--is Seth Hurwitz, another independent concert promoter from Washington, D.C., and co-owner of that city's fabled 9:30 Club.

ALSO: From the Associated Press:


Ticketmaster has agreed to change the way it sells tickets over the Internet.

New Jersey Attorney General Anne Milgram announced the settlement Monday. She says the changes apply to all Ticketmaster sales nationwide.

The case stems from complaints received about ticket purchases for a Bruce Springsteen concert. Ticket seekers were redirected from the main Ticketmaster site to a subsidiary that charged more.

Milgram says Ticketmaster has not admitted wrongdoing but has agreed to pay $350,000 to the state. She says the company will also compensate ticket holders who complained and change how it handles secondary sales.

Ticketmaster did not return calls seeking comment Monday.


Testimony of David A. Balto, Senior Fellow,
Center for American Progress Action Fund

To the Committee on the Judiciary,
Subcommittee on Antitrust, Competition
Policy and Consumer Rights
United States Senate
Regarding "The Ticketmaster/LiveNation Merger: What does it mean for Consumers and the Future of the Concert Business?"

Tuesday, February 24, 2009

Introduction

Mr. Chairman, Ranking Member Hatch, and other distinguished members of the Senate Judiciary Committee, I want to thank you for giving me the opportunity today to speak about the severe competitive problems that may arise from Ticketmaster's proposed acquisition of LiveNation. As detailed in my testimony, this merger of dominant firms raises serious competitive concerns and could potentially lead to significantly higher prices for the hundreds of thousands of consumers who purchase tickets every day. Moreover, by creating a monopolist in the promotion and ticket purchase markets, rivals in the concert promotion market and competition from secondary ticket services will be severely diminished. The Antitrust Division of the Justice Department should thoroughly investigate this merger and challenge it if it raises a significant threat to reduced competition.

I make the following points in my testimony:

• Ticketmaster holds a monopoly in the ticket sales market. It has faced no significant competition in that market until LiveNation's recent entry. Ticketmaster's control of the primary market alone warrants enjoining the merger;
• The proposed merger raises serious vertical concerns. By combining a ticketing monopolist with a dominant firm in marquee concert promotion the merged firm will be able to foreclose competition in both markets, leading to less choice and higher prices;
• The proposed merger poses a significant threat to independent concert promotion;
• The proposed merger will diminish competition from secondary ticket services which offer the potential for greater rivalry in the ticketing market; and
• The DOJ should go beyond this merger and investigate anticompetitive conduct inthe ticketing market. Similarly, the FTC should investigate deceptive conduct by Ticketmaster. Ticketmaster's monopoly power is preserved through a series of exclusionary arrangements that diminish the potential for rivals to arise and challenge the monopoly. In the 1990s those charged with antitrust enforcement failed to challenge Ticketmaster's conduct based on theoretical arguments that consumers were protected by ease of entry into the market or that exclusive arrangement were procompetitive. Because of that inaction, consumers have paid dearly in excessive prices for ticketing services. History has demonstrated that those theoretical arguments that the market would prevent consumer harm have been proven wrong and consumers have paid dearly in excessive prices for ticketing services. Further competition and consumer protection enforcement action is necessary to prevent the substantial ongoing harm in this market and this Committee should call on both the DOJ and Federal Trade Commission to act.

My testimony today is based on my experience of over a quarter century as an antitrust practitioner, the majority of which was spent as a trial attorney in the Antitrust Division of the Department of Justice, and in sever

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This page contains a single entry by Jim DeRogatis published on February 23, 2009 3:10 PM.

U2, "No Line on the Horizon" (Universal) [3.5 STARS] was the previous entry in this blog.

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