DOJ reportedly preparing antitrust lawsuit against Live Nation, shares slide 9%

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DOJ reportedly preparing antitrust lawsuit against Live Nation, shares slide 9%
Credit: © Reuters.

The Justice Department is poised to file an antitrust lawsuit against Live Nation (LYV), which could significantly impact the leading concert promoter and its subsidiary Ticketmaster, the Wall Street Journal reported on Monday.

This legal action, reportedly expected to be launched within weeks, stems from allegations that Live Nation has abused its dominant position in the market to stifle competition in event ticketing. The specific allegations in the impending lawsuit remain undisclosed.

LYV shares fell nearly 9% in premarket trading Tuesday.

This lawsuit follows a series of grievances against Live Nation, including complaints about high ticket fees, poor customer service, and anti-competitive behavior.

These issues have attracted scrutiny from lawmakers, regulators, and state attorneys general, fueling arguments that the company's 2010 merger with Ticketmaster has harmed market competition and calls for the company to be dismantled.

The origins of this legal challenge date back to a 2010 settlement agreement between Live Nation and the Justice Department, which was supposed to end in 2020. However, due to violations of this agreement by Live Nation, which allegedly coerced venues into exclusively using Ticketmaster, the settlement was extended until 2025.

The revised agreement includes a clause that penalizes Live Nation $1 million for each instance of coercing venues to avoid competitors, aiming to prevent retaliation against venues that choose alternative ticketing services.

“We frankly would not be surprised if a DOJ suit did materialize, especially in a political year when either party is apt to posture to attract younger voters,” said analysts at Benchmark Company.

“Any suit would likely be based on the DOJ’s new emphasis on ‘vertical’ merger challenges and object to Live Nation maintaining presences in businesses that do not directly compete with each other – namely its 2010 de novo entry ticketing to complement established presences in concert promotion, ticketing, operating venues and artist management,” they added.

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