Disgruntled Taylor Swift fans have now joined the growing list of critics of the Department of Justice’s (DOJ) antitrust enforcement. Critics argue that the company has abused its power and created a monopoly over the live entertainment industry.
In 2010, the DOJ actually signed off on a merger between Live Nation and Ticketmaster. Under the terms of the consent decree between the DOJ and Live Nation, the company was prohibited from threatening event venues with losing access to its tours if they used alternative ticketing providers. While the provision was set to expire in 2020, the DOJ extended it until 2025 due to repeated violations by Live Nation.
Ticketmaster’s monopoly over the concert ticket market is just one example of how the DOJ is failing consumers. Rather than tackle the competitive issues surrounding Ticketmaster or Big Tech, the DOJ’s latest case prevented two book publishers from merging.
US Antitrust Laws
The goal of federal antitrust laws is to curb the efforts of businesses to reduce competition in the marketplace or to create or maintain monopolies. The United States enacted its first antitrust law in 1880. The Sherman Act prohibits all agreements and conspiracies in restraint of interstate trade and commerce, such as price fixing, market allocations, boycotts, and bid rigging,
As the Supreme Court stated in Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 4 (1958), the Sherman Act “rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions.”
Another federal statute, the Clayton Act, prohibits mergers, certain exclusive dealing arrangements, and price discrimination that may substantially reduce competition or create a monopoly. The Clayton Act was amended in 1976 by the Hart-Scott-Rodino Antitrust Improvements Act to require companies planning large mergers or acquisitions to notify the government of their plans in advance.
The DOJ is tasked with enforcing both the Sherman Act and the Clayton Act and may do so through both civil and criminal proceedings. The Federal Trade Commission (FTC) can also investigate and bring civil suit against businesses that violate federal antitrust laws. States attorneys general and private citizens also have the ability to pursue certain antitrust violations.
Criticism of Weak DOJ Enforcement
As the Taylor Swift ticket fiasco made clear, when competition is stifled, consumers generally suffer. Antitrust enforcers like the DOJ must be more assertive in challenging conduct and consolidation that threatens competition.
Earlier this year, Jonathan Kanter, Assistant Attorney General for the DOJ’s Antitrust Division, signaled that the DOJ may be up to the task, declaring that “the era of lax enforcement is over, and the new era of vigorous and effective antitrust law enforcement has begun.” According to Kanter, the DOJ should be litigating cases rather than relying on consent decrees, which often fail to preserve competition.
“If we do not bring cases, the law will stagnate. Even as our economy undergoes revolutionary change, over-reliance on settlement would leave us governed by yesterday’s law,” Kanter argued. “We need to bring cases to enable the courts to wrestle with the realities of today’s markets and ensure antitrust law is fit for purpose in the modern economy.”
Unfortunately, the DOJ’s efforts to ramp up enforcement have faced hurdles. This fall, the agency lost three cases seeking to block mergers in the health technology, agriculture and defense contracting industries. In the DOJ’s defense, courts have set the evidentiary bar very high in recent years, making it difficult to win antitrust challenges. However, that doesn’t mean that the DOJ should bring only the slam dunk cases. To be successful, agencies tasked with antitrust enforcement also need sufficient funding and resources. Funding levels are 18% less than in 2000, despite growing concentration and market power.
Lastly, both the courts and antitrust enforcers must recognize that the U.S. economy has evolved over time. In the case of Ticketmaster, concert tickets are now exclusively sold online. Other industries have undergone significant changes due to advances in technology and the speed with which data can be shared.
Antitrust law, including the legal analysis and models used to decide cases, must follow suit by reflecting the competitive realities of today’s markets, with a continued focus on protecting and promoting competition. Given that it will take a while for case law to evolve, Congress can jumpstart the effort by making substantive changes to the antitrust statutes that strengthen antitrust enforcement.