The Department of Justice is rumored to be planning to sue Live Nation-Ticketmaster for monopolizing markets for live events. Diana L. Moss explores what potential remedies the government might pursue to address competitive harms in markets such as ticketing for concert venues and sports arenas, and ticket resale, including the viability of breaking up the company.

The Biden administration’s antitrust enforcers are newly focused on policing monopolies under Section 2 of the Sherman Act, a historically under-enforced area of antitrust law. The United States Department of Justice (DOJ) and Federal Trade Commission (FTC) have brought a number of cases against the large digital technology companies. With antitrust in the news, there is growing public awareness of enforcement decisions about which monopolies are pursued, and which are not.

For example, public sentiment is that antitrust cases are also needed to address high impact “paycheck and pocketbook” issues for consumers and workers. These cases would correct serious market power problems in food, healthcare, and manufacturing that hit consumers and workers hard, through higher prices and lower wages, and a lack of choice. Given the consumer-facing nature of the live events markets, a rumored DOJ monopolization case against Live Nation-Ticketmaster is likely to generate deep public interest and support.

The 2010 merger between Live Nation and Ticketmaster vertically integrated the former’s concert promotion and venue operation services with the latter’s ticketing and artist management services. At the time, Ticketmaster, controlled a whopping 80% of the ticketing market. With this dominance in ticketing, the merger supercharged Live Nation-Ticketmaster’s incentives to stifle competition from smaller rivals, to the detriment of fans and artists.

The math was, and remains, simple. Independent venues, artists, and fans have few, if any, choice other than Ticketmaster. Without competition, any losses the live events behemoth incurs from cutting off competing independent venues for not choosing Ticketmaster is more than made up by higher ticket fees. To protect its dominance, Ticketmaster has strong incentives to stifle competition in resale and drive fans back to its own ticketing platform to collect higher, and duplicative, ticket fees.

A DOJ case is a long awaited opportunity to restore competition in markets where Live Nation-Ticketmaster’s durable monopoly has gone unchecked for decades. In that time, the company’s practices have been highly publicized in Congressional hearings and Ticketmaster’s high ticket fees and platform meltdowns have galvanized public attention. There are few markets where small competitors fear retaliation more than from Live Nation-Ticketmaster.

Frustration with the entrenched Live Nation-Ticketmaster monopoly has fast-forwarded the conversation around antitrust enforcement against the company to the endgame. That is, namely, if the government were to prevail in a monopolization case against Live Nation-Ticketmaster, what remedies or fixes would restore competition and deliver relief to fans and artists? This question has not been taken up by antitrust enforcers or the courts in a major monopolization enforcement action since the decades-old AT&T and Microsoft cases.

The focus on antitrust remedies is sharpening. Some past remedies have worked well to jump-start competition, including the breakup of AT&T in 1984. But the list of failed merger remedies is growing, especially on the merger front. For example, divestitures in the past mergers of Safeway-Albertsons, Hertz-Dollar Thrifty, and Sprint-T-Mobile were wildly unsuccessful. Buyers of divested assets lacked experience and the ability to compete, sometimes leaving the market or going bankrupt, while some assets were reacquired by the merged company.

This legacy will most certainly affect any discussion of remedies in a Live Nation monopolization case. In the meantime, “What’s the fix?” is a question that pops up early in monopolization cases. Complaints contain a request for “relief” that can include a variety of remedies, such as breaking up a company into separate or smaller parts, imposing rules and restrictions on business operations, and injunctions on anticompetitive practices.

Hands down, the most effective remedies are those that promote a firm’s incentives to compete, rather than restrictions on engaging in discriminatory or retaliatory practices against smaller competitors. That means changing how a company is structured to reduce market share and, therefore, squelch incentives to limit competition. While this may sound straightforward, some antitrust remedies are controversial.

The government’s failed efforts to restore competition in live events markets in the wake of the 2010 Live Nation-Ticketmaster merger demonstrate that stronger interventions are necessary. Indeed, the DOJ imposed what proved to be ineffective conditions, such as nondiscrimination and anti-retaliation provisions. These did nothing to change Live Nation-Ticketmaster’s incentives to exercise its market power. And they were easy to violate.

The DOJ’s failed 2010 remedies only entrenched the monopoly problem, where the simple threat of retaliation has become enough to keep smaller competitors “in line.” In 2020, the DOJ found evidence of anticompetitive practices against independent concert venues, in clear violation of the government’s conditions on the 2010 merger. But in another head-scratcher, the DOJ simply extended the ineffective remedies for another five years—a boon to Live Nation-Ticketmaster and an enormous loss for independent venues.

With Ticketmaster’s current 70% share of the ticketing market, its dominance continues to provide powerful incentives to leverage market power into adjacent markets. Indeed, over the last 15 years, Live Nation has amassed a 60% share of the concert promotion market and has exclusive contracts with about 70% of venues. It is not hard to see, therefore, that a monopolization case against Live Nation-Ticketmaster is the only way to get to the root of the competition problem in ticketing.

Remedies that would emerge from a successful monopolization case would target the source of Live Nation-Ticketmaster’s market power—its monopoly in primary ticketing. If any lessons were learned from the legacy of failed antitrust enforcement in live events, future fixes would most assuredly not include the 2010 conditions that kept Live Nation-Ticketmaster’s market power intact. Another option is an injunction. That could include a ban on Live Nation’s exclusive contracts with independent venues that require them to take Ticketmaster’s platform.

Any fix that delivers permanent relief from monopolistic practices in the live events markets will come from a structural remedy. That means breaking up Live Nation-Ticketmaster. For example, only a complete divestiture, or break off of Ticketmaster, would eliminate Live Nation’s incentive to throttle independent venues. This could jump start competition by encouraging entry in the ticketing market, especially for rivals with better ticketing platforms and stronger incentives to compete on ticket fees.

Given Ticketmaster’s high market share, however, even a breakoff may not be enough to fully restore competition in ticketing, especially in resale. Ticketmaster would remain dominant in primary ticketing and incentives to frustrate competition from resellers would remain intact. So, we could continue to see practices such as ticket holdbacks, slow ticketing, and delayed tickets that are designed to disrupt competition in resale and steer fans back to Ticketmaster.

The fix for this problem is to break up Ticketmaster into a number of smaller pieces, similar to the remedy in AT&T that created the Baby Bells.” More rivalry would create stronger incentives to compete on ticket fees, quality of service, protecting ticket buyers’ privacy and data, and improving ticketing platform technology. But should we ever see a break off/break-up remedy emerge from a successful Live Nation-Ticketmaster monopoly case, a major challenge will be who buys the pieces of Ticketmaster.

The antitrust agencies have struggled with some divestitures in merger cases. Firms with little experience in a market or with speckled histories of antitrust violations are poor candidates for purchasing divested assets—especially in the Live Nation-Ticketmaster context. Looking to existing market participants, such as Seat Geek, Stub Hub, AXS, and other experienced participants in live-events markets, as potential buyers of Ticketmaster assets will be important.

The wheels of antitrust enforcement turn slowly. Monopolization cases can take years to litigate. High burdens of proof to show monopoly power and practices designed to reinforce or extend that power make the government’s job in court even more challenging. But if ever there were a monopoly where evidence of harm is plentiful, it would be Live Nation-Ticketmaster. A conversation about potential fixes opens the door to what competitive markets for live events would look like, something that competition, fans, and artists surely deserve.

Author’s Disclosure: Diana Moss works for the Progressive Policy Institute. PPI is supported by foundations, individuals, and corporations. No funding source influenced the arguments expressed in this article or stands to benefit from them.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.