A Win for Music Fans – Court Permits Live Nation-Ticketmaster Antitrust Suit to Continue

Jack Libby

It’s a common story for music fans who love live concerts. You see your favorite artist is playing near you, and you immediately sign up for the lottery. What do you win if you’re selected in the lottery? Free tickets? No. You get the opportunity to buy tickets. So, you set your alarm for when tickets go on sale and use multiple devices to maximize your chances of buying any ticket. If you’re lucky, you get your ticket at a relatively reasonable price. If you aren’t lucky and lose out to the professional ticket-scalpers who have an army of bots, you’re then forced into the secondary market. If you want to see your favorite artist, you’ll have to pay significantly higher prices. But even after you mentally accept the financial hit it will take to see your favorite artist, you face another surprise when you check out in the form of myriad fees. These fees can turn out to be around 27 percent of ticket price.

For modern concertgoers, this process is expensive, stressful, and disheartening. One company dominates the ticket market: Ticketmaster. In the past three decades, it has consolidated its market power to become a virtual monopoly. In 2010, Ticketmaster merged with Live Nation, a large concert promoter. Live Nation controls in some way around 60 percent of all major U.S. concert venues. Meanwhile, Ticketmaster holds an over 80 percent market share for major concert primary ticketing. Together, Ticketmaster and Live Nation dominate both the primary and secondary ticket markets. While these companies thrive, ticket prices surge.

This year, multiple parties have sought to break up this monopoly. In May, the U.S. Department of Justice and various state governments sued Live Nation-Ticketmaster, accusing them of anti-competive behavior. While this suit in the Southern District of New York is in its infancy, another suit has already seen major opinions from federal district and circuit courts.

Just two weeks ago, the Ninth Circuit Court of Appeals delivered a major procedural win in a class action suit against Live Nation. In Heckman v. Live Nation Entertainment, Inc.,[1] the court refused to enforce a forced arbitration clause stemming from Live Nation and Ticketmaster’s terms of service contract.[2] The underlying class action suit accused Live Nation and Ticketmaster of anticompetitive business practices in violation of the Sherman Antitrust Act.[3] Live Nation filed a motion to compel arbitration, citing the terms of use accepted by the plaintiffs when they navigated Live Nation’s website.[4]

Arbitration clauses are common in company websites’ terms of service. Even though consumers are unlikely to read these lengthy documents, they can be bound by terms of service. However, these terms can sometimes be so unfair or “unconscionable” that courts will refuse to enforce them. While this is rare, the District Court, and now the Ninth Circuit Court of Appeals, found that the quirks of Live Nation’s terms of service clearly went too far.

The terms of service include a delegation clause which forced claims into “mass arbitration”. Through this process, similar claims are consolidated into “bellwether” cases. The outcome of these bellwether cases decides the fate for similarly situated plaintiffs who did not participate, and had no right to particpate. Live Nation can appeal an arbitration decision in favor of consumers, but consumers cannot appeal an arbitration decision in favor of Live Nation.[5] Also, complaints have a tight page limit of 10 pages.[6]

While these terms on their face may seem unfair, the legal standard for a finding of unconscionability requires a court to find both procedural and substantive unconscionability.

First, the court found the terms to be procedurally unconscionable in part because they were “borderline unintelligible.”[7] The Ninth Circuit noted that the terms of use were riddled with internal inconsistencies that made it highly unlikely that a reasonable consumer could understand them.[8] Even Live Nation’s counsel struggled to explain these terms during oral argument.[9]

Second, the court found the terms substantively unconscionable “to a substantial degree” because of the quirks of the arbitration clause as described above.[10]

Accordingly, the Ninth Circuit affirmed the district court decision, and the case continues as a class action suit. To be clear, this is merely a procedural victory, and concertgoers will likely remain dependent on Ticketmaster for the foreseeable future while these antitrust lawsuits are litigated.

[1] (Heckman II) No. 23-55770, 2024 WL 4586971 (9th Cir. Oct. 28, 2024).

[2] Id. at *2.

[3] Heckman v. Live Nation Entertainment, Inc. (Heckman I), 686 F. Supp. 3d 939, 946 (C.D. Ca. 2023).

[4] Id.

[5] Heckman II, 2024 WL 4586971 at *5.

[6] Id. at *4.

[7] Id. at *8.

[8] Id.

[9] Id.

[10] Id. at 11.