Antitrust Law Daily Wrap Up, TOP STORY—7th Cir.: Ticket purchaser unable to state “tying” claims against Live Nation, (Mar 26, 2014)

By Jody Coultas, J.D.

The U.S. Court of Appeals in Chicago affirmed a district court holding that a concert promoter’s inclusion of the cost of parking in the price of concert tickets did not constitute an unlawful tying arrangement in violation of the Illinois Consumer Fraud Act (Batson v. Live Nation Entertainment, Inc., March 25, 2013, Wood, D.).

The purchaser bought a ticket to see a rock band, and realized that the ticket price included a $9 parking fee for a spot he did not want and was not going to use, as he had walked to the venue and purchased the ticket right before the show started.

The federal district court in Chicago held that the purchaser failed to state a “tying” claim under the Illinois Consumer Fraud Act (ICFA) based on Live Nation’s practice of including the cost of parking in the price of concert tickets.

The ICFA prohibits unfair and deceptive business practices. A practices is unfair when it (1) offends public policy; (2) is immoral, unethical, oppressive, or unscrupulous; or (3) causes substantial injury to consumers.

The court declined to hold that a tying arrangement violates federal antitrust law if its anticompetitive effect is felt in the tying product market. The purchaser argued that the practice of including the price of parking in the cost of the concert ticket violated a public policy against tying. A tying arrangement exists when a seller exploits power over one product to force the buyer to accept a second product.

There was no evidence that Illinois law or policy required a rule that would ban a tying arrangement under the ICFA, even if that tying arrangement were found not to be anticompetitive for antitrust purposes. The Illinois Supreme Court has never found a tying arrangement to violate Illinois public policy where that arrangement has not also violated antitrust law, and there were no allegations that Live Nation violated antitrust law. A tying arrangement violates the Sherman Act if the seller has appreciable economic power in the tying product market and if the arrangement affects a substantial volume of commerce in the tied market. The purchaser failed to allege anything that would plausibly show that Live Nation’s parking tie-in has affected a substantial volume of commerce in parking.

The parking fee was not so oppressive as to leave the purchaser with little alternative except to submit to it, according to the court. The court assumed that there was no way he could avoid paying the fee as he did not know about the fee prior to buying the ticket. However, it was clear that the purchaser was willing to pay the face price in order to see the band. The ticket price bundled the costs for entrance and parking. The court noted that it probably bundled much more. There may have been an opening act before the headliner took the stage; the venue might have had a policy banning outside food or drink; and so on. There is no rule that requires everything to be sold on a fully unbundled basis. Even if the purchaser learned about the parking fee component afterwards, there was no evidence that the concert was worth any less than the face price of the ticket.

The court assumed that the injury was substantial and not outweighed by any countervailing benefits to consumers or competition that the practice produces. There was no evidence, however, that paying the parking fee caused substantial injury to consumers. The purchaser could have avoided the fee by choosing alternative entertainment. Although the purchaser did not know about the fee until he bought the ticket, this was not enough to show that the fee was oppressive.

This case is No. 13-1560.

Attorneys: Mark T. Lavery (Lavery Law Firm) for James Batson. Sean M. Berkowitz (Latham & Watkins LLP) for Live Nation, Entertainment, Inc., Live Nation Worldwide, Inc. and Live Nation Chicago, Inc.

Companies: Live Nation Entertainment, Inc.

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