Live Nation Loses Bid For Dismissal Of Amp-Tying, State Antitrust Charges

A judge denied an attempt by Live Nation to dismiss some parts of the federal antitrust suit, leaving intact claims made by several states and allowing the Department of Justice to go forward with so-called “tying” claims related to the live giant’s amphitheater business.

LN argued 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 and that ticketbuyers are too far downstream of the alleged anticompetitive action to be harmed.

“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 read, adding drolly: “That would certainly be a surprising result from an economic perspective.”

U.S. District Court Judge Arun Sabrumanian, however, ruled that no matter how far separated the end consumer is still potentially harmed by exclusionary practices.

“The thrust of the complaint is that Live Nation engaged in a variety of exclusionary conduct to maintain its monopoly over primary-ticketing services, and consumers suffered injury by using those services and getting overcharged. Whatever market definitions one employs, where a defendant unlawfully maintains its monopoly over a product through a course of exclusionary conduct focusing on that product, consumers of that product alleging that they were overcharged suffer a cognizable injury,” he wrote.

The motion also sought 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.

Subrumanian, however, found that Live Nation and the amps are actually doing business with artists and that promoters are merely acting on behalf of the artists. He conceded that Live Nation is under no obligation to deal with competitors, but that tying artist access to amps to those artists using LN’s promotions services would, in fact, be illegal tying, as promoters are a conduit for the artists’ wishes.

“If the evidence shows that promoters book venues on behalf of specific artists, that artists are the driving force behind which venues to book and when, and that artists are
coerced into using Live Nation as their promoter if they want access to Live Nation’s amphitheaters, plaintiffs may have a viable tying claim,” he wrote.