Antitrust Law Daily Wrap Up, ANTITRUST—C.D. Cal.: Songkick denied injunctive relief over Live Nation, Ticketmaster practices, (May 12, 2016)

By Greg Hammond, J.D.

A ticket provider has failed to demonstrate a likelihood of success on the merits of its monopolization and conspiracy claims against Live Nation Entertainment, Inc. and Ticketmaster LLC, arising from alleged exclusive contracts with performance venues, the federal district court in Los Angeles has decided. The provider’s motion for preliminary injunction, which sought to prohibit Live Nation and Ticketmaster from requiring the provider or artists to pay service fees to the defendants in order for artists to receive ticket allocations for artist presales, was therefore denied (Complete Entertainment Resources LLC v. Live Nation Entertainment, Inc., May 11, 2016, Fischer, D.).

Ticketmaster, a sales tickets and distribution company, merged with Live Nation, a concert promoter, in 2010 to become the world’s largest primary ticketing services and concert promotion company, according to a complaint filed by Complete Entertainment Resources LLC, doing business as Songkick. Ticketmaster and Live Nation purportedly hold long-term exclusive dealing contracts with the vast majority of major concert venues throughout the United States. Songkick—a concert ticket technology company that designs ticket presales and marketing for bands and musicians—claimed that Ticketmaster and Live Nation have attempted to eliminate competition in the artist presale ticketing services market through these contracts. The case was before the court on Songkick’s motion for preliminary injunction.

Likelihood of success. The court denied the motion for preliminary injunction, finding that Songkick failed to provide any showing that antitrust law bars anything Ticketmaster and Live Nation are doing. The contracts generally include a carve-out for the venue to sell “house seats,” which are defined to include tickets provided to a performing artist to distribute through legitimate fan clubs in accordance with guidelines, the court stated. Songkick’s logic, however, that the defendants have a large market share in the ticketing services business, that they are preventing Songkick from doing something it wants to do, and that the defendants should therefore be stopped by the court, did not amount to an antitrust analysis, the court found. Further, the court determined that even if Ticketmaster and Live Nation blocked two particular artist presales, such allegations fall far short of a showing that the defendants’ behavior is maintaining, enhancing, or exploiting their market power in any relevant market.

Songkick’s loss of money did not amount to irreparable harm, the court next concluded, because this kind of harm can be compensated at the end of the case. Even if there was some small showing of a likelihood of irreparable harm, it failed to outweigh the failure to raise any substantial likelihood of success on the merits.

Acquisition challenge. In a separate order entered the same day, the district court granted the defendants’ motion to dismiss Songkick’s Section 7 Clayton Act claim, which challenged the initial merger between Live Nation and Ticketmaster. The merger was completed in 2010, but Songkick’s complaint was filed in December 2015. The merger challenge claim was consequently barred by the Clayton Act’s four-year statute of limitations. The hold and use doctrine, which allegedly allows the Clayton Act statute of limitations to be restarted if assets are used in a different manner from the way that they were used when the initial acquisition occurred, and that the new use injures the plaintiff, was inapplicable in this case because the supposed “new use” was suspected and complained of prior to the merger.

The case is No. 2:15-cv-09814-DSF-AGR.

Attorneys: Adam B. Wolfson (Quinn Emanuel Urquhart and Sullivan LLP) for Complete Entertainment Resources LLC. Daniel M. Wall (Latham and Watkins LLP) for Live Nation Entertainment, Inc. and Ticketmaster LLC.

Companies: Complete Entertainment Resources LLC; Live Nation Entertainment, Inc.; Ticketmaster LLC

Cases: AcquisitionsMergers Antitrust CaliforniaNews