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Shareholder Files Suit Against Live Nation Alleging Concealment of Anticompetitive Practices

 |  November 13, 2023

Live Nation Entertainment Inc. is facing a shareholder derivative complaint, filed on November 10 in the US District Court for the Central District of California. The complaint alleges that the company’s directors, including CEO Michael Rapino, concealed anticompetitive misconduct in public filings and other disclosures prior to a Department of Justice (DOJ) investigation raising antitrust concerns, reported Bloomberg.

The lawsuit follows a proposed class action filed in August, which also pointed out stock drops coinciding with the DOJ’s investigation announcement.

According to the shareholder derivative complaint, Live Nation’s directors and CEO misled investors before the DOJ investigation, omitting or misrepresenting details about the company’s anticompetitive conduct. Alleged misconduct includes entering into extended restrictive contracts with artists and venues, charging high fees for ticketing services, and retaliating against venues for collaborating with alternative promoters or ticketing services.

According to Bloomberg, in 2010, Live Nation’s merger with Ticketmaster led to a Justice Department consent decree, requiring the company to refrain from conditioning concerts on the use of the Ticketmaster platform at a given venue. The complaint notes that Live Nation faces an automatic $1 million fine for each violation, with the consent decree set to expire in December 2025.

Read more: Live Nation Antitrust Federal Lawsuit Is Thrown Out

Despite these commitments, a New York Times article on November 18, 2022, revealed a DOJ antitrust investigation into Ticketmaster and Live Nation after the ticketing platform crashed during a presale for Taylor Swift tickets. Live Nation’s share price reportedly declined almost 8% on that day.

In February 2023, National Public Radio reported that a Senate antitrust committee urged the DOJ to continue its investigation into Live Nation. This development led to a more than 10% drop in the company’s stock on February 24.

Further intensifying the scrutiny, in July, Politico reported that the DOJ was preparing to file an antitrust lawsuit against Live Nation by the year’s end. The company’s share price reportedly fell by nearly 8% on July 28.

The proposed class action against Live Nation and its executives remains pending in the Central District of California court. Shareholder Mark Steven Zwick, representing Live Nation, seeks damages, pre-judgment interest, and legal fees for alleged violations of the Securities Exchange Act between February 23, 2022, and July 28, 2023.

Source: News Bloomberg Law