President and Chief Financial Officer of Live Nation Entertainment Joe Berchtold (left to right), CEO of Seat Geek Jack Groetzinger, President and CEO of Jam Productions Jerry Mickelson, Senior Vice President of The James Madison Institute Sal Nuzzo, Vice President for Legal Advocacy at the American Anti-Trust Institute Kathleen Bradish and singer-songwriter Clyde Lawrence are sworn in at the start of the subcommittee hearing Tuesday. Photo by Bonnie Cash/UPI | License Photo
WASHINGTON, Jan. 24 (UPI) -- Ticketmaster was hit by a flood of attempts to buy tickets to Taylor Swift's Eras Tour, and its website faced outages and caused long wait times, Live Nation Entertainment CFO Joe Berchtold told a congressional subcommittee Tuesday.
The company said its system suffered delays due to "historically unprecedented demand," receiving over 3.5 billion system requests that caused the site to crash for hours. Secondary ticketing platforms listed some tickets for Swift's tour for five-figure prices.
Berchtold delivered his remarks in a hearing dubbed "That's the Ticket; Promoting Competition and Protecting Customers In Live Entertainment," aimed at examining a "lack of competition in the ticketing industry" after the 2010 merger between Live Nation and Ticketmaster to form Live Nation Entertainment.
Sens. Amy Klobuchar, D-Minn., and Mike Lee. R-Utah, the chairwoman and ranking member, respectively. of the Subcommittee on Competition Policy, Antitrust and Consumer Rights, called the hearing after Ticketmaster's website failed when presale tickets for Swift's tour went on sale.
"In hindsight, there are several things we could have done better," Berchtold said of the ticket meltdown. "While the bots failed to penetrate our systems or acquire any tickets, the attack required us to slow down and even pause our sales. This is what led to a terrible customer experience."
Klobuchar said one potential solution to logjams would be greater competition in the ticket sales industry.
"I believe in capitalism and to have a strong capitalist system. You have to have competition, you can't have too much consolidation -- something that unfortunately for this country, as an ode to Taylor Swift, I will say we know 'all too well,'" the senator said in opening comments in a reference to a Swift song.
In her statement, Klobuchar cited her love for music and the many icons, from Prince to Bob Dylan to Lizzo, who have come from her home state.
In a rare show of bipartisan support, senators from both parties chastised Live Nation for its failure to protect the ticketing website from bot attacks and its use of high fees that can leave consumers paying significantly more than the listed price for tickets.
"You have brought together Republicans and Democrats in an absolutely unified cause," Sen. Richard Blumenthal, D.-Conn., told Berchtold.
Several senators from the committee pressed Berchtold on the Live Nation's outsize industry control and whether it pressures venues to use its services -- a claim he denied.
Berchtold admitted that Ticketmaster could have handled the Swift ticket sale better, but repeatedly shifted blame largely to "industrial-scale ticket scalping."
Throughout the hearing, the other witnesses -- including the CEOs of Live Nation's competitors SeatGeek and JAM Productions, and antitrust experts from liberal and conservative think tanks -- supported senators' claims that Live Nation's behavior stifles competition in the industry.
When Sen. Ted Cruz, R-Texas, asked the witnesses if they view Ticketmaster as a monopoly, four said yes.
Antitrust regulators approved the merger between Live Nation and Ticketmaster in 2010, but in 2019 the Department of Justice found that the companies were improperly requiring venues to use Ticketmaster to book Live Nation acts.
"Here we are almost 13 years later, faced with a flotilla of allegations and complaints that the merged entity has done exactly what it said would never happen," Lee said in his opening comments.
David Balto, an antitrust lawyer, said that the incident illustrates a failure of antitrust enforcement.
"This is a tale of how antitrust enforcement isn't supposed to, did not work and failed miserably," Balto said. "I think having a strong position by people in the judiciary committee ... will really strengthen the Department of Justice position."
Legislative remedies floated during the hearing ranged from mandating that ticket sellers display "all-in" pricing to making tickets non-transferable, a proposal highlighted by Sen. John Kennedy, R-La., in his questioning.
Berchtold implied that Live Nation would support legislation to promote transparency in the industry, but did not make specific promises.
"I think what we've heard does cry out for some response by Congress, but candidly, I'm not sure that the anti-trust laws are the best tool in our toolbox," said Sen. John Cornyn, R-Texas.
While Klobuchar said sparking stronger anti-trust legislation was one primary goal of the hearing, along with sharing information with the public and aiding DOJ investigations, it remained unclear whether Congress will take decisive action to strengthen oversight of the industry.