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Supreme Court Ruling May Open Ticketmaster to More Lawsuits
IndustryLegalTop Story
May 14, 2019
Sean Burns
A ruling by the U.S. Supreme Court on a class-action lawsuit against Apple could mean trouble for Ticketmaster, according to analysis posted by several outlets. Associate Justice Brett Kavanaugh joined the four liberal-leaning justices in a 5-4 decision that the lawsuit – which claims Apple violates antitrust rules with its iTunes App Store – should be allowed to move forward on Monday.
Plaintiffs in that case say that Apple’s monopoly on its app store, which includes a 30% cut off app sales through that marketplace, encourages developers to raise prices – in effect passing on Apple’s fees to the consumer. Apple had hoped to sidestep the matter entirely, but this ruling derailed that strategy, though it stopped far short of actually calling Apple’s system unfairly monopolistic.
How, you might ask, could this bring any peril to Ticketmaster, which has an iOS app product, but is otherwise completely unrelated? Analysts say that companies that offer similarly walled-off online systems could find themselves targeted by similar lawsuits now that the court’s decision has come down in favor of allowing the consumer class-action to continue.
“It definitely should make tech companies wonder how the antitrust laws will be applied going forward in an online platform environment,” says Gene Kimmelman, president of consumer advocacy group Public Knowledge and a former antitrust official with the Justice Department.
According to The Hollywood Reporter, the decision that kept consumers from being able to sue companies like Apple in cases like this – Illinois Brick Co. v. Illinois in 1977 – held that indirect purchasers had no standing to sue, only direct purchasers. In effect – concertgoers had no remedy to sue Ticketmaster if they believed that the company’s business practices were pushing ticket prices into the stratosphere. Only the venue could bring such action – unlikely given both the difficulties in operating while in an open fight with the Live Nation-owned ticketing giant and the lucrative exclusive contracts they lock venues in with. That’s the logic the Eight Circuit went with in a similar lawsuit – Campos v. Ticketmaster.
Now such lawsuits may have a path to their day in court, thanks to the unlikely pairing of a controversial Donald Trump nominee to the court and four liberal justices.
“If a retailer has engaged in unlawful monopolistic conduct that has caused consumers to pay higher-than-competitive prices,” writes Kavanaugh in the majority opinion on the case. “It does not matter how the retailer structured its relationship with an upstream manufacturer or supplier – whether, for example, the retailer employed a markup or kept a commission.”
Ultimately, even with a ray of daylight to pursue legal action against companies like Ticketmaster, success is far from guaranteed for consumers seeking legal remedy against sky-high ticket prices inflated by the Ticketmaster-Live Nation behemoth at the center of the live entertainment industry. Calls by politicians for DOJ review of the company’s practices have gone unanswered. A recent anti-trust lawsuit filed against Ticketmaster in the wake of last summer’s “Scalpergate” reporting was forced into arbitration due to the terms and conditions on tickets sold within the system.
This decision merely allows one potential path for consumers to take, removing an obstacle that has blocked similar action in the past. Whether or not any new or existing lawsuits can seize the opportunity and find success and damages where others have failed is an entirely different question.