The Justice Department is set to file an antitrust lawsuit against entertainment conglomerate Live Nation as early as Thursday, multiple sources familiar with the matter confirmed to CBS News.
The federal government will be joined in its challenge by several state attorneys general. Prosecutors are expected to question the practices of Ticketmaster's parent company and could try to force a change in the way the company does business, the sources said. In many cases, when the Justice Department sues over antitrust issues, it seeks a judge to force divestments within a company or change the way it operates.
The Justice Department declined to comment. Live Nation did not respond to a request for comment from CBS News.
News of the antitrust action was first reported by the Washington Post.
The move comes after a years-long investigation by the Justice Department's antitrust division. In 2022, CBS News confirmed that the Department of Justice had already been looking at the company and its Ticketmaster unit before the disastrous mismanagement of ticket sales for Taylor Swift's Eras Tour.
As of November 2022, Ticketmaster website crashed during a pre-sale period for the Eras Tour, sparking outrage from fans who waited hours to get tickets, only to be disappointed.
The department's investigation focused on whether Live Nation was abusing its market dominance in the ticketing industry.
The Justice Department's antitrust division reached out to music venues and ticket industry participants to learn more about Live Nation's methods, focusing on whether the company has monopolized the industry , according to The New York Times, which first reported the investigation.
At a Senate hearing in January 2023, the artists testified about Live Nation's control over them. Clyde Lawrence of the Lawrence Group stated that Live Nation is both a promoter, a venue and a ticket company.
“Because Live Nation owns the venue, fronts the money for the show and sells the tickets, they have inordinate power when it comes to negotiating with the artists,” he told the panel, offering an example: for a show, Lawrence set ticket prices at $30. After Ticketmaster added a 40% fee, fans paid $42 per ticket. After facility costs were paid, the band made $12 per ticket, about half of which went to cover tour costs.
“That leaves us with $6 for an eight-piece band, before taxes, and we also have to pay our own health insurance,” Lawrence said.
Long before Ticketmaster's 2010 merger with Live Nation, Pearl Jam filed a similar complaint against Ticketmaster before Congress in 1994, claiming that the company's exclusive ticketing contract with most venues country premiere gave artists and fans little or no choice when it came to buying and selling tickets.
Pearl Jam attempted to tour venues not controlled by Ticketmaster, but were unable to do so. The band also sued Ticketmaster, but ultimately lost their battle. Also a group of ticket buyers unsuccessfully sued Ticketmaster in the 1990s, claiming the company had monopolized the ticketing business, The Associated Press reported.
