Live Event Giants Face Legal Action for Alleged Unlawful Ticket Reselling Methods by the Federal Trade Commission
In a significant move, the United States federal government, along with seven states, has filed a lawsuit against Ticketmaster and its parent company, Live Nation Entertainment. The lawsuit alleges that the companies have violated the Better Online Ticket Sales (BOTS) Act, a law signed by President Donald Trump during his first term in 2016.
The BOTS Act, designed to prevent the use of bots to buy concert tickets in bulk and resell them, is at the heart of the lawsuit. The FTC claims that Ticketmaster and Live Nation Entertainment have failed to crack down on ticket resellers, resulting in customers paying more than face value for popular concerts and events.
The issue of price gouging has been a notable concern in the live entertainment industry, with sky-high prices during Taylor Swift's Eras Tour in 2022 drawing fierce backlash against Ticketmaster. Resale prices hit tens of thousands of dollars, causing concern among consumers and lawmakers alike.
According to the FTC, hidden fees from Live Nation and Ticketmaster can be as much as 44% of the final cost of the ticket. Between 2019 and 2024, Ticketmaster has collected $16 billion in fees. The lawsuit also accuses Ticketmaster of 'bait-and-switch pricing' and false claims about ticket purchase limits.
In its press release, the FTC stated that ticket brokers routinely and substantially exceeded the alleged purchase limits imposed by Live Nation. However, no companies were charged in 2022 for violations of the BOTS Act related to Taylor Swift's concert. There is no connection between BOTS Act charges and Taylor Swift's concert in the search results.
Shares of Live Nation (LYV) dropped more than 2% in midday trading following the lawsuit announcement. The FTC's Chairman, Andrew Ferguson, stated that American live entertainment should be accessible to all and should not cost an arm and a leg. He added that the lawsuit aims to make live entertainment more affordable for consumers.
President Donald Trump, during his second term, also signed an order addressing the issue of price gouging, further highlighting the concern. He stated that he hadn't known much about price gouging, but he checked it out and found it to be a big problem.
Lawmakers accused Ticketmaster of acting as a monopoly during Taylor Swift's Eras Tour, as the company dominates the ticketing market, controlling ticketing for about 80% of major venues in the United States. Consumers spent nearly $83 billion buying tickets from Ticketmaster between 2019 and 2024, according to the FTC.
The FTC did not immediately receive a response from Live Nation regarding the lawsuit. As the case unfolds, it will be interesting to see how this will impact the live entertainment industry and ticket pricing in the future.
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