Live Nation Entertainment is in hot water. Accused of anti-competitive practices and failing to disclose that its behavior may draw regulatory scrutiny, shareholders of the ticketing company are being invited to join a class action lawsuit filed earlier this month. The complaint alleges that Live Nation executives knowingly misled investors and that the company engaged in abusive behavior such as charging high fees, extending contracts with talent, and retaliating against venues.
According to Rolling Stone, Live Nation has denied allegations that it functions as a monopoly. The class action suit comes at a time of renewed scrutiny for Ticketmaster and Live Nation, including a Senate judiciary panel questioning if their 2009 merger should have been allowed.
Several law firms are now investigating whether Live Nation lied to investors by hiding the full extent of its legal vulnerability. Pavithra Rajesh, lawyer representing investors, stated, “Live Nation chose not to disclose that it is ‘reasonably likely to incur regulatory scrutiny and face fines, penalties, and reputational harm’ as a result of its allegedly anticompetitive conduct.” Rajesh went on to highlight how the company’s stock prices fell after reports of the Justice Department opening an antitrust investigation against the company, sparked by the ticketing platform’s systems crashing during a Taylor Swift presale.
Furthermore, Live Nation settled with the Justice Department in 2019 over allegations of violating a consent decree. Legal experts have since argued that the company’s conduct fell outside of what was permitted in the decree.
In response to the lawsuit, Live Nation has maintained its view that the DOJ’s allegations are unfounded. “We strongly disagree with the DOJ’s allegations in the filing and the conclusions they seek to draw from six isolated episodes among some 5,000 ticketing deals negotiated during the life of the consent decree. Nevertheless, in keeping with our decision to settle, our focus is now on bringing this matter to its conclusion and continuing to deliver the best live event experiences to fans everywhere.”
The class action suit is just the latest chapter in a long-running dispute between Live Nation and investors. Investors have argued that the company’s anti-competitive practices and lack of disclosure have caused investors to suffer losses, and the lawsuit seeks to recover those losses. With more scrutiny from the government and now the courts, Live Nation may be forced to answer to its investors and its alleged practices.
Source: Rolling Stone