LOS ANGELES (CN) — Live Nation Entertainment and its Ticketmaster subsidiary on Thursday failed to persuade a federal judge to throw out a putative antitrust class action by consumers who claim they paid excessive prices for concert tickets because of the companies’ illegal monopoly on ticket sales.
U.S. District Judge George Wu tentatively denied Live Nation’s motion to dismiss the lawsuit, finding that the consumers had antitrust standing because their purported harm from inflated ticket fees, as a result of the companies’ anticompetitive arrangements with concert venues, was neither indirect nor speculative.
The judge, at a hearing in downtown Los Angeles, agreed to take another look at a recent, unpublished decision by the Ninth Circuit Court of Appeals that upheld the dismissal of an antitrust lawsuit consumers had brought against Amazon.com that argued they were stuck paying higher prices for merchandise bought from third-party sellers on the website because Amazon forces these sellers to use its fulfillment service at “supracompetitive” rates.
“Hogan maps 100% on this case,” Live Nation’s attorney Tim O’Mara told the judge, referring to the Ninth Circuit case that was decided last month.
Kevin Teruya, arguing for the plaintiffs, disagreed and said that, in the Amazon.com case, the harm to consumers was incidental and indirect because the retailers passed on their excessive shipping costs to them, whereas in the Live Nation case, consumers have to pay Ticketmaster directly for the exorbitant ticket fees.
“I’ll clarify, if necessary, my views on Hogan,” Wu told the lawyers.
Live Nation, the world’s largest concert promoter for major venues, and Ticketmaster, the ticketing company it acquired in 2010, have long provoked the ire of fans over the high ticket prices they are stuck paying because of Ticketmaster’s control of the market.
According to the antitrust complaint, Live Nation pays the world’s biggest artists over the top to arrange their tours and makes up its losses from these arrangements by coercing concert venues in long-term, exclusive contracts to use Ticketmaster to handle the ticket sales.
As a result, the plaintiffs argue, Ticketmaster dominates the market for tickets at large concert venues and can charge fans excessive fees in the so-called primary market for these tickets. In addition, they claim, Ticketmaster forces consumers and ticket brokers who want to resell tickets they bought on its site to use Ticketmaster as well, given the company’s control over the secondary market for concerts at these venues.
Wu, in his tentative ruling, said the consumers hadn’t provided enough detail to make a plausible argument that Live Nation’s contracts with artists run afoul of antitrust law. Teruya said at the hearing that the plaintiffs at this point didn’t intend to pursue that theory.
The consumers’ antitrust case is similar to the more recent lawsuit that the U.S. Justice Department and state attorneys general brought against Live Nation in New York federal court and that recently survived the company’s motion to dismiss.
In the Los Angeles case, first filed in 2022, the judge earlier rebuffed Live Nation’s attempt to force the ticket buyers to resolve their grievances through “mass arbitration,” saying that the switch to a different arbitration scheme without clearly informing its customers “boggles the mind.”
The same judge had agreed with Ticketmaster in previous lawsuits, including a similar antitrust case brought by the same attorneys in the current lawsuit, and found the arbitration agreement was binding on consumers. The Ninth Circuit Court of Appeals upheld Wu’s decision in that case, but the changes Ticketmaster made in 2021 to its arbitration agreement prompted a new antitrust complaint three years ago.
In October of last year, a Ninth Circuit panel agreed that Wu had properly denied the entertainment companies’ motion to compel arbitration, prompting Live Nation to try to dismiss the case on the pleadings.