Obama DOJ Makes Ticketmaster Work For Its Ticket To Ride With Live Nation

Although Ticketmaster’s got a ticket to ride with its merger target, Live Nation, the ticket vendor is finding that the price of a ticket for a merger has gone up in the Obama Administration.

The Antitrust Division of the U.S. Department of Justice forced Ticketmaster this week to take actions to achieve antitrust clearance of its merger with Live Nation.  Among other things, Ticketmaster was compelled to license its intellectual property to a competitor for five years as a condition for deal approval.

Ticketmaster, the largest vendor in primary ticketing, sought to merge with Live Nation, a small competitor in primary ticket vending and the largest concert promoter in the U.S.  The Division determined that the merger would have substantially lessened competition in primary ticket sales by resulting in higher ticket prices for events.

To remedy this likely competitive harm, the Division caused Ticketmaster to divest one of its subsidiaries and to provide that subsidiary (as an independent competitor) with the ability to utilize Ticketmaster’s “host” primary ticketing electronic platform.  As a result, this new competitor will be able to offer consumers the same sophisticated e-ticket technology offered by the dominant, merged entity on a substantial scale.

By assuring that smaller competitors are on the same technological “playing field” as the incumbent, merged entity post-merger, the Obama Administration has shown that it will utilize merger enforcement remedies that go beyond asset divestitures – the remedy typically used by its predecessors.  Conduct remedies and ongoing Division oversight of merged parties it appears is now a remedy that merging parties can expect will be used with greater frequency (at least during this Presidential Administration).

This raises the specter that some form of conduct remedy could be used by the Division to assure that the merger of Microsoft and Yahoo! does not result in anticompetitive harm.  The Division could compel the parties to license their search technologies (in lieu of divesting them wholesale) to nascent competitors in order the achieve merger consummation.  It will be interesting to see whether the Division will rely on business conduct commitments to remedy any potential competitive harm that could be caused by that deal, which is currently being actively reviewed by the Division.