Live Nation Seeks Dismissal Of Amp-Tying Charges, State Antitrust Claims

In a motion filed late Wednesday, Live Nation asked a federal judge to dismiss two parts of a sweeping antitrust suit.

Thirty-nine states and the District of Columbia have signed on to the suit, filed by the U.S. Department of Justice, which seeks to break-up Live Nation and Ticketmaster, alleging that the company unfairly and uncompetitively manipulates the live entertainment market. Some two-thirds of the state plaintiffs are seeking treble damages via a legal doctrine that would allow the states to act on behalf of citizens harmed by Live Nation’s alleged conduct.

LN argues in the filing that the conduct alleged by the states would not harm consumers. If it were proven, it would harm venues, promoters, artists and competitors, rather than ticket buyers, thus precluding the states’ parens patriae claims. LN says the consumer harm alleged by the states isn’t logical.

“The premise of their claim appears to be that in a world in which their marginal costs went down, venues would respond by gratuitously reducing prices for consumers rather than pocketing the incremental profit,” the motion reads, adding drolly: “That would certainly be a surprising result from an economic perspective.”

The motion also seeks to dismiss claims made by the DOJ that the company engages in illegal tying, a practice in which a buyer’s ability to purchase one good or service is conditioned on its purchase of another. The DOJ alleges that Live Nation does not permit artists to play its owned and operated amphitheaters unless they engage LN as their promoter.

As lawyers have repeatedly argued since the case was filed in May, LN does, in fact, book shows from other promoters in its sheds, but even if it didn’t, they say, case law militates against a so-called “duty to deal.” In other words, Live Nation — or, in fact, any company — is not required to do business with its competitors.

Live Nation is asking for oral arguments before Judge Arun Subramanian.