Live Nation Argues Ticketmaster Antitrust Class Action Claims Must Be Pursued Through Arbitration

Ticketmaster’s parent company, Live Nation, is trying to have an antitrust class action lawsuit over its pricing structures pushed out of public court and into arbitration, despite a recent federal court decision shooting down a similar argument made by the company in another case, describing the forced arbitration policy contained in the websites terms of services as “substantively unconscionable.”

In May, Abraham Leifer filed a Ticketmaster class action complaint (PDF) against Live Nation, accusing the company of holding a virtual monopoly on ticket sales through its subsidiary, which it allegedly uses to jack up prices.

Live Nation controls the live market and event economy, while Ticketmaster has cornered the market on concert and event ticket sales, giving consumers few options. Once Live Nation merged with Ticketmaster, it created a “vertically integrated monopoly and juggernaut trust,” the lawsuit claims.

The antitrust allegations were filed against Live Nation the same month the company announced a massive Ticketmaster data breach, which exposed private identifying information of more than half a billion customers. This has already resulted in a number of class action lawsuits against Ticketmaster, seeking damages for individuals who now face an increased risk of identity fraud, which Live Nation may also attempt to force through an individual arbitration process.

The Ticketmaster antitrust class action lawsuit highlights what plaintiffs say is a major problem with the consolidation of the services, resulting in a lack of options for consumers to go elsewhere.

However, on November 15, Live Nation filed a motion (PDF) calling for plaintiffs who initiated the antitrust lawsuit to be forced into arbitration, as stipulated in Ticketmaster’s Terms of Service. Live Nation and Ticketmaster require consumers to agree to the Terms of Service every time they log in or purchase tickets, which includes a forced arbitration policy.

The company claims that plaintiffs must first pursue the Ticketmaster antitrust claims through the arbitration process, and only after that is complete and unresolved should the class action lawsuit go back to the court.

Plaintiffs have argued that the forced arbitration policy is unenforceable, because of the Live Nation and Ticketmaster monopoly over events and ticket sales. As a result of the merger, plaintiffs maintain that consumers have no recourse but to agree to the terms, since there is virtually no other way to get tickets for major events, leaving them susceptible to artificially high prices and forced arbitration if things go wrong.

In the motion, Live Nation acknowledges that the request comes less than a month after the Ninth Circuit Court of Appeals in California shot down a similar effort to force unwilling consumers to arbitrate Ticketmaster class action claims in another case, citing problems with the arbitration firm, New Era ADR.

“The court found that New Era’s rules—principally, its ‘mass arbitration protocol,’ including the application of precedent to bellwethers, and certain ‘procedural limitations’ applicable to both parties, such as limitations on discovery—were substantively unconscionable under California law,” the motion noted.

Live Nation called the decision flawed and indicates that it is seeking to have that ruling overturned. The company is also asking the U.S. District Court for the Southern District of New York, where the Leifer lawsuit was filed, to ignore that ruling, claiming that it does not apply in this situation. The company also claims that the arbitration company has changed its rules, to address the problems raised by the Ninth Circuit Court of Appeals.