Professor Dave: LIveNation, Ticketmaster anti-trust verdict is winning ticket for consumers
In this episode of Legally Speaking on WFMJ Today, Professor David Betras convenes a session of the shade tree law school to teach viewers a few things about anti-trust law and how it led to a landmark case in which a jury found that Ticketmaster and Live Nation were operating as a monopoly in the live concert market. You can watch the segment here.
In order to understand the law that led to the verdict that may make concert tickets affordable for average Americans, Professor Betras said we must travel back in time to the 1890s.
At that time, which is commonly referred to as the Progressive Era, a few companies led by Robber Barons like Andrew Carnegie and J.D. Rockefeller, had seized control of vital industries, including coal mining, oil production, and the railroads.
Teddy Roosevelt and other progressives reacted by passing the Sherman Anti-Trust Act that forced the breakup of the monopolies. In 1914 Congress strengthened Sherman by passing the Clayton which established the Federal Trade Commission and empowered it to regulate commerce and prevent the formation of monopolies.
Sherman and Clayton are among the most important statutes ever enacted because competition is key to the survival of a capitalist economic system like ours.
Remove competition from the equation and consumers not only suffer, they contemplate revolution.
With that as background, let’s discuss the Live Nation/Ticketmaster case. For years artists and fans had complained that the companies had a stranglehold on the live concert market which led to an explosion in ticket prices.
The jury in the case agreed. But the battle is not over. There now has to be a second trial to determine how the monopoly should be broken up. That means ticket prices won’t be coming down to Earth any time soon.
Some of our older viewers may remembers that the Bell Telephone system was involved in a similar case. Back in the old days when phones hanged on our walls the Princess phone was the height of innovation, if you wanted to buy a phone you had to purchase equipment made by Western Electric which was owned by Beel and hook it up to hard lines owned by the company. For all intents and purposes, AT&T controlled every part of America’s phone system.
In 1974 the federal government filed suit alleging the obvious: AT&T was a monopoly. In 1982 the company and the feds settled the case. AT&T agreed to be broken up into seven “Baby Bells,” AT&t was allowed to maintain it’s long-distance business and retain ownership of Western Electric.
The settlement was finalized in 1984 which illustrates how long these complicated lawsuits can drag on. Today, telephone service looks nothing like it did when AT&T monopolized the market. The settlement spurred innovation and competition that led to the development of cellular service, the iPhone, and other technology that was unimaginable in the mid-70s.
The bottom line is this: Competition is good for the economy and consumers. Here are a couple more examples: In the 1960s and ‘70s the U.S. severely restricted imports of foregone cars. The result? The Big Three automakers rested on their laurels and made, pardon my French, crappy vehicles.
When import restrictions were lifted and domestic producers were forced to compete the quality of vehicles made in the U.S. increased exponentially.
The same goes for home and auto insurance. The insurers don’t spend billions of dollars on advertising because they don’t want your business. They do, desperately. So I shop my coverage every year and normally save $800 to $900.
The same principle applies to plane tickets, hotel rooms, washing machines, and big screen TVs—just about everything we buy is better and cheaper because of competition—and that’s what will happen to concert tickets when the Live Nation case is resolved.
So, here is the key take away from Professor Dave’s lesson: Competition good, monopolies bad.
Class dismissed. Let’s have some Landmark donuts.
