Written by: Awakhiwe Ndlovu
Edited by: Melissa Tan
On November 15th, 2023, thousands of Taylor Swift fans awaited the opening of pre-sale tickets for concerts set for the coming year. However, those thousands instead were met with confusion, with reports of website crashes, bots, and severely limited tickets displayed on the Ticketmaster website. Though many were quick to display their fury over the catastrophe with criticisms of Swift and her team, the real entities in control of ticket distribution were the corporations of Ticketmaster and Live Nation. This joint enterprise faces scrutiny over the aftermath of the November 15th ticket fiasco and is currently awaiting a Senate hearing. Not only is their role in this event being investigated, so too is their role as a monopoly and the power they currently hold over the live-entertainment industry.
The United States has a history of companies attempting to form monopolies where they are the sole provider of a good or service in a given market. The government attempted to thwart this imbalance of power in 1890 through the passing of the Sherman Antitrust Act, which prohibited the colluding of companies with the intent of forming a monopoly, and banned the “placement of unreasonable restrictions on trade markets” through price fixing and price discrimination.” A monopoly is when a company has “the exclusive possession or control of the supply of or trade in a commodity or service." Their market power allows them to raise prices by whatever means they deem necessary since there is no imminent competition at play. With the added factor of their service being unique, such as the case with Ticketmaster, the monopoly now has strong barriers to entry making it even harder for competitors to enter the market.
With the widespread media attention that came from this debacle, the issue has reached the ears of Congress and is now set to be heard by an antitrust panel in a Senate Hearing. Senator Amy Klobuchar (D-MN) spearheads this movement with multiple remarks, stating how “the high fees, site disruptions and cancellations that customers experienced shows how Ticketmaster’s dominant market position means the company does not face any pressure to continually innovate and improve.” Continuing, Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services. That can result in dramatic service failures, where consumers are the ones that pay the price. The committee meets in hopes of breaking down the event that occurred and uncovering the powerful forces that were at play to cause a fandom of nearly a million people to bring this case to court.
The hearing, while mainly focused on the Ticketmaster incident, shines light into modern-day monopolies and how they have worked the system. The government's original creation of antitrust policies was meant to curb the deadweight loss an economy would experience with the implication of monopolies because the true effect of a company being a sole producer of a good when it is not a natural monopoly is that the consumer surplus will decrease due to service failures. Comments from the Chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights state how the continuation of monopolies violating antitrust laws and exhibiting high fees suggests that the company “continues to abuse its market positions.” Politicians, such as House Representative Alexandria Ocasio-Cortez (D-NY), have additionally spoken out about the Ticket Master fiasco. Ocasio-Cortez reminds constituents “that Ticketmaster is a monopoly” and “its merger with LiveNation should never have been approved”, referencing the approval by the Justice Department’s Antitrust Division under former President Barack Obama. Before 2010, Live Nation and Ticketmaster were separate entities, with their companies often overlapping in competition, with one being a promoter and another selling tickets. However, combining the two companies effectively eliminated any potential competition in the industry and increased profits, but later on, decreased consumer surplus and efficiency.
While the success of the Ticketmaster and Live Nation merger has provided tickets to millions of people, the long-term effects and underlying power it places on citizens are too much for a country to handle. As expressed in this scenario, public government control can aid, rather than deter a company and the economy in terms of efficiency and fairness in a market. Taylor Swift fans might have just saved the U.S. economy.
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