Ticketmaster is facing immense scrutiny over its fiasco with recent Taylor Swift ticket sales. Swift fans, also known as “Swifties”, are rightfully upset, as some reported waiting in a digital waiting room for more than 6 hours in order to buy tickets on Ticketmaster before coming away empty handed.
But it’s not just concert goers that are making a big deal of the inflated prices and unfair buying regulations. Many lawmakers are calling for renewed investigations into Ticketmaster violating antitrust laws, as they have way too much power over ticket sales and act as a monopoly.
In 2010, Live Nation merged with Ticketmaster, essentially creating one giant platform for ticket sales. Lawmakers and music fans alike tried to prevent this from happening as they claimed it violated antitrust laws by creating a monopoly over the industry.
The merger went through anyways, and every few months Ticketmaster comes under scrutiny. In fact, the first time Ticketmaster made the news in a negative way was back in 1992 when Pearl Jam was upset that they were charging a $1 service fee. Even then it was tough to overcome Ticketmaster, and eventually the band gave up. Needless to say, the service fees have not gotten any cheaper since then.
Other bands have also tried to take on Ticketmaster without success, as they have too much power over international ticket sales. Other incidents, including $5,000 tickets to a Bruce Springsteen concert earlier in the year thanks to Ticketmaster’s infamous algorithm, also renewed music fans' anger at the monopoly.
But this time might be different. In addition to fans and the media, multiple politicians have raised concerns and want to take action.
Representative Alexandria Ocasio-Cortez said in a tweet that “Ticketmaster is a monopoly, its merger with LiveNation should never have been approved, and they needed to be reigned in. Break them up.”
And Representative William James Pascrell, Jr., who was among the millions of fans put on a waitlist for Swift tickets, tweeted “The Ticketmaster-Live Nation monopoly should never have been allowed to merge and must be broken up.”
The public scrutiny seems to be working. The New York Times reported the DoJ had opened an antitrust investigation into the owner of Ticketmaster, focused on whether Live Nation Entertainment has abused its power over the multibillion-dollar live music industry.
Other famous monopolies
Investigations of Ticketmaster once again renew calls from lawmakers and the public alike to break up other longstanding monopolies.
In the U.S., for example, broadband and phone bill prices are extremely high in comparison to other countries. This is due to very limited options because many phone companies have conducted mergers and crushed the competition. In fact, a 2020 study found that 83.3 million Americans have only one broadband option!
The baby formula shortage of early 2022 was partly due to the fact that just two companies – Abbott and Reckitt Benckiser – control about 80% of the US market.
And of course there are the longstanding calls to break up Big Tech, namely Apple, Microsoft, Meta, Google and Amazon.
Breaking up big tech
While it sounds attractive to break up these companies that control so much of their respective industries, in reality it is quite complex, and may not be beneficial in the long run.
The benefits of doing so are obvious. Breaking up their strong hold on each industry will allow for more opportunities for small businesses and put an end to Big Tech’s practice of swallowing competition (Google has acquired over 270 companies since 2001!)
Another benefit is reduced data privacy and security concerns. When a few companies are able to monitor most of our online movements, there is cause for concern that they will do with it what they want. There are also concerns for data breaches, as hackers can steal a huge amount of information by infiltrating just one place.
However, there are also a few cons and impracticalities involved in breaking up Big Tech:
The first one is with the social media department. With Facebook, for example, having increased competition does not always make sense, as users want to be on the same platform in order to communicate. Having a lot of smaller companies is rather impractical, and social media users will probably go back to the most popular one rather quickly.
Another reason is due to costs. The main reason why Google, Facebook, and some Microsoft services are so popular is because they provide incredible value for the best price on the market – free. Smaller companies would not be able to provide such a high quality service at no cost and it would either be far worse quality or it would require subscription costs, all of which would lower people’s usage significantly.
How will this affect the markets?
Many people want the Federal Trade Commission to get more involved in breaking up monopolies. Especially now in an economic downturn, it can help fuel new competition and renewed innovation in industries that are controlled by a few big companies.
If the FTC does attempt to break up Ticketmaster, phone service companies, or Big Tech, it will change the economy significantly.
While there is no doubt that it will encourage innovation, it also has the danger of increasing prices (in the short term) and may lead to other big companies taking over in the long run – similar to Big Tech today.
If these cases reach the courts, it can also lead to other companies being investigated and new laws affecting patents, competition, and the way Mergers and Acquisitions are conducted.
Ticketmaster’s upcoming Congressional hearing and what happens in the preceding months will be important to watch for all businesses and the economy as a whole – not just for live music fans.