In a 2024 lawsuit, the Justice Department’s Antitrust Division alleged that Live Nation Entertainment and Ticketmaster, which is owned by Live Nation, illegally stifles competition at the hundreds of venues Live Nation operates across the United States, artificially driving up ticket costs for concertgoers. The DOJ asked for the two companies, which merged in 2010, to be broken up.

But last week, while a trial was underway in federal court in Manhattan, the DOJ and Live Nation announced a settlement that will not force the company to split from Ticketmaster. The deal requires Live Nation to forgo some exclusive booking arrangements, which will allow certain venues to choose which concert promoters to work with, and also caps ticketing service fees at 15 percent at those venues.

The settlement was rejected by 36 states that had joined the DOJ’s lawsuit last year, including Massachusetts. The trial resumed Monday.

In this edited conversation, Rebecca Haw Allensworth, an antitrust scholar from Vanderbilt Law School who is currently the Ropes & Gray Visiting Professor of Law at Harvard Law School, explains litigation and what it may mean for ticket buyers.

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What is Live Nation alleged to have done with respect to ticketing and concert venues?

According to the government, Live Nation dominates three related markets. One is ticketing. If you go to a major concert, most of the time you’re going to go through Ticketmaster, and that’s owned by Live Nation. Live Nation also owns, according to the government, the vast majority of what they’re calling major concert venues, which is anything larger than a theater or small venue, but not quite a stadium. The market in which Live Nation is most dominant for venues is outdoor amphitheaters. They also own a large portion of the promoting services — the entities that put on the concert, advertise it, come up with some of the concepts for the tour.

The problem, from the government’s perspective, is that if you want to enter any one of these markets as a competitor, you’ll find yourself dealing with Ticketmaster or Live Nation. That puts Live Nation in a position of controlling competition at all three layers.

That’s an example of vertical integration — a company that operates on multiple levels within the same market. The major problem with vertical integration is what it does for potential competitive entry. It’s how Live Nation has managed to stay as dominant and grow its dominance over the last 15 years.

The settlement appears far less punitive to Live Nation than what the DOJ initially sought. What happened?

The Biden administration asked for a breakup of Live Nation and Ticketmaster. That is not a part of the settlement. The settlement the DOJ appears to have agreed to would put some restrictions on what Live Nation and Ticketmaster could do with the business, with contracts, with artists, with contracts, with venues. It has a 15 percent cap on the fees that Ticketmaster can charge, but only for amphitheaters — a small fraction of Ticketmaster’s business.

Antitrust is meant to protect competition with the belief that stronger competition is better for consumers. This doesn’t do a lot to protect competition. Rather, it’s like a Band Aid over the symptoms of poor competition. There are a few examples in the agreement that do have the possibility of opening up competition to a limited extent, but nothing that would go as far as a breakup would to create opportunities for a ticketer or a promoter to enter the market. That’s what the breakup was going to be for.

Was breaking up Ticketmaster and Live Nation a real possibility or an example of antitrust overreach that critics of the Biden administration often complained about?

Oh, it was a very real possibility. This is really different, for example, from the Google monopolization case over search. There, a breakup was always very unlikely. Here, a breakup was probably the most likely remedy if they had found liability. And I think liability was likely because of how strong the remaining claims were and the fact that it was a jury trial. One way of understanding this settlement is that Live Nation-Ticketmaster was legitimately worried about the breakup.

Does the settlement meaningfully address the anti-competitive issues or reduce costs to ticket buyers? As you mentioned, the 15 percent cap on ticket fees is only at amphitheaters, not other types of venues, where most concerts are held.  

The 15 percent sounds good on paper. But when you’re vertically integrated, you can take your profit in a different market. So, maybe the prices will be reduced slightly in ticketing, but then they will go up in promotion services or elsewhere. That’s a problem.

When Ticketmaster sells its ticketing to a venue, they’re no longer going to be requiring it to be exclusive. That could be a limited toehold for a competitor to occupy. But there is nothing in the term sheet outlining the basic terms of the settlement suggesting that the pricing must be the same for both exclusive and non-exclusive, which leads me to conclude that they could charge more for non-exclusive deals. That could have the same effect as requiring exclusivity if it’s significantly cheaper. This is the problem with a nonstructural remedy, with a non-breakup: they’re still huge, they’re still a monopolist, the venues are still afraid of them, and the artists still have to go through them. So, they have the power to do the same thing through other means because they are such a powerful monopolist in this space.

Dozens of states are now pressing ahead with the trial. Is there still a chance ticket buyers could get more favorable terms?

Yes, the states could still win and get a better outcome from consumers. The judge in this case could order a remedy that goes beyond the settlement with the DOJ, including the possibility of a breakup — the very outcome that Live Nation seems to have been trying to avoid with the settlement.