US Congress member Bill Pascrell Jr has written to the country’s Federal Trade Commission and Department Of Justice urging them to put the spotlight back on the 2010 merger of Live Nation and Ticketmaster, and ultimately to “overturn it for the good of consumers and America”.
Pascrell is a long-time critic of the American ticketing market in general and the 2010 merger of Live Nation and Ticketmaster in particular, and has previously proposed new regulations of said market via his BOSS Act.
Last year he was also one of five members of the US House Of Representatives to call on the newly elected Joe Biden government to review the operations of Live Nation and its Ticketmaster division, and more specifically the consent decree that the live giant entered into with the DoJ to alleviate competition law concerns created by the 2010 merger, an agreement which was extended for another five years in 2019.
There are critics of Live Nation/Ticketmaster in the US Senate too, of course, and two of them have also been very recently vocal about that criticism, with Richard Blumenthal and Amy Klobuchar also calling for the DoJ to again investigate the ticketing market and Ticketmaster’s role in it. Their latest call for action in this domain was prompted by a recent segment about the ticketing business on John Oliver’s ‘Last Week Tonight’ show’.
Pascrell’s latest intervention, however, is in response to an inquiry launched by the FTC and DoJ earlier this year that is reviewing how big mergers and acquisitions are regulated in the US.
Launching that inquiry in January, FTC Chair Lina M Khan said: “This inquiry launched by the FTC and DoJ is designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals. Hearing from a broad set of market participants, especially those who have experienced first-hand the effects of mergers and acquisitions, will be critical to our efforts”.
In his letter to the two government agencies, Pascrell writes: “I welcome your invitation to offer public comment to the FTC and DoJ to modernise merger guidelines to better protect against anticompetitive deals. I write to suggest you streamline and simplify the ability of the FTC and DoJ to undo mergers that ultimately harm competitiveness and contribute to market concentration”.
“Furthermore”, he adds, “I urge you to closely assess one such disastrous merger, the 2010 marriage of Live Nation and Ticketmaster, and overturn it for the good of consumers and America”.
After summarising why it’s important that US law ensures that the country’s marketplaces remain competitive, Pascrell continues: “With powers entrusted by the Congress, the FTC and DoJ hold the ultimate responsibility of approving or rejecting mergers that could negatively impact that balance of competition in favour of big business. Existing merger regulations are the main tool in the agencies’ toolbox and so must be sharpened to be most effective”.
“First written in 1968, today’s current merger guidelines and their authors could not have predicted the size and growth of our modern economy”, he goes on. “Nor could they have anticipated the tidal wave of consolidation across virtually all industries that has overwhelmed the United States in recent decades”.
He then focuses on the notion that if a merger is initially approved but then turns out to be bad for the market, it should the undone. “A merger between companies is not written in stone”, he says. “Consolidation cannot be accepted as a law of nature, immutable and unchangeable”.
“Rather”, he adds, “where a merger has harmed industry competition, stifled freedom of choice, and hurt workers, it should be undone. In strengthening merger rules, I urge you to update guidelines for reversing mergers where necessary in line with our modern national economy and capable of being implemented reactively”.
Then the letter turns to Live Nation. “The union of Live Nation and Ticketmaster is a poster child of consolidation gone bad”, he claims. “When Live Nation, the nation’s biggest concert promoter, and Ticketmaster, the largest ticket provider, sought to combine, they assured regulators that their fusion would promote competition in the live events marketplace”.
“Several members of Congress, including myself, vocally disagreed. We practically begged President Obama’s administration to stop the deal. But President Obama’s top antitrust regulator at the time said, ‘there will be enough air and sunlight in the space for strong competitors to take root, grow, and thrive’. Consequently, the merger was waved through in 2010”.
“Twelve years later”, he argues, “there are no strong competitors taking root, growing or thriving, in the primary ticket market and live events market. In 2008, the two companies held more than 80% of the market share and today that figure is even larger”.
Citing a Government Accountability Office study he requested in 2017, Pascrell writes: “The GAO cited a market rife with practices that are ‘not fully transparent’, and that Live Nation Entertainment, which claims more than half of ticket sales in the United States, engages in questionable gimmicks to conceal its extra costs. These include the ubiquitous service fees, processing fees, facility fees, and promoting fees that have become the bane of customers”.
“Because Live Nation Entertainment controls a significant portion of both the primary and secondary ticketing markets, the extra fees give the company an enormous competitive edge. Ordinary Americans just trying to enjoy a little entertainment pay the price”.
Also quoting President Biden’s support for reforming merger rules, Pascrell says: “To protect consumers in the market, I ask the FTC and DoJ to investigate the Live Nation Entertainment-Ticketmaster monopoly”
He then concludes: “The FTC and DoJ’s joint efforts have the potential to remake our country for the better and are a breath of fresh air after decades of inaction and neglect by our executive branch. Thank you for consideration to make it easier to undo bad mergers and to finally fix the live events market”.
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