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A concert tour sparking off an anti-trust investigation might seem strange but that’s what’s happening with Taylor Swift’s upcoming Eras tour. The ticketing arrangements by Ticketmaster have led to dissatisfied fans suing the platform.

The suit alleges Ticketmaster’s parent, Live Nation Entertainment, engaged in “fraud, price-fixing and antitrust-law violations while selling advance tickets". The filing also accuses Ticketmaster of “intentionally misleading purchasers by allowing scalpers and bots access to TaylorSwiftTix presale".

The Ticketmaster website was overwhelmed by presales to “verified fans", who numbered around 3 million. The site crashed a lot and fans found themselves facing long delays and unable to checkout with tickets.

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The company ended up cancelling general sales “due to extraordinarily high demands" and “insufficient remaining ticket inventory". There were complaints bots were gaming the system, and cornering tickets, to be resold at premiums of thousands of dollars.

Ticketmaster charges an unspecified service fee per ticket. As lower-priced tickets became unavailable, fans opted for more expensive tickets. It’s possible the service fee charged by Ticketmaster escalates with more expensive tickets. This is one of the allegations.

The US Senate’s Anti-Trust Panel has said it will hold a hearing centred on this, to see if consolidation in the entertainment and ticketing industry harms customers and artists. The panel head, Senator Amy Klobuchar, said, “The high fees, site disruptions and cancellations shows how Ticketmaster’s dominant market position means the company does not face any pressure to innovate and improve.“

It’s quite conceivable that some of the senators on that panel are “Swifties" as the pop-star’s fans are known. The panel could recommend Ticketmaster – Live Nation be broken up. Ticketmaster merged with Live Nation in 2010 in a deal where the US Department of Justice set terms. At the time, it was said the merger would encourage competition. Instead, the senators claim, "Ticketmaster prices have more than tripled".

The Ticketmaster app and platform have leading market share in the US live entertainment ticket market, which was worth over $10 billion annually, pre-pandemic. The market has recovered to roughly the same levels, after a catastrophic crash in 2020 and 2021. In Jan-Mar 2022, Ticketmaster held around 55 per cent market share. It is likely to have increased share to 60 per cent after it entered a partnership with Snapchat in early 2022, to allow for easy transactions by Snapchat users. It picked up over 2 million new users in Oct 2022.

There are other ticketing apps and just having dominant market share doesn’t lead to anti-trust investigations. Competition commissions like the US Federal Trade Commission (or India’s CCI, or the EU’s European Commission) try to judge if highly concentrated markets are affected in terms of pricing, quality of service, compensations for workers, etc., due to monopolistic concentration. Of course, those are the allegations here.

“Scalping" or charging black-market premiums on tickets is common practice. Ticketing platforms must be braced for scalpers using bots, which bid to buy multiple blocks of tickets, and log in such large numbers that they force legitimate customers off the site. It’s like a denial-of-service attack with a website being flooded with so many automated requests that it cannot function.

But experience shows it’s possible to deal with this, even at far larger scales of complexity. Compare the chaos of the Eras presales with ticketing at the Qatar World Cup. With due respect to Ms Swift, football draws 1,000 times as many fans, who try to buy tickets with complications of dealing in multiple currencies, etc. (The FIFA app did have some glitches after the WC started, and some ticket-holders had to reconfirm tickets).

But FIFA has coped by making tickets available a year in advance, even before the final list of 32 nations was known. So far, with 16 matches to go, over 2.45 million spectators have attended, and the remaining 16 matches are over 96 per cent booked up.

FIFA’s ticketing ties customers to a verifiable identity (linked to the passport) with a digital pass called a Hayya Card. The e-ticket and Hayya double as a Qatar visa. There are limitations on the number of tickets a customer can buy. Tickets can be resold through the FIFA platform, but only at face value. Of course, there are ways to scalp and generate premiums on resales. But FIFA makes this as hard as it can, and it has been cracking down on scalpers for many years.

Referring back to Senator Klobuchar’s opinion about the need to improve and innovate, FIFA has an incentive to ensure smooth ticketing although it’s a monopoly — disappointed football fans are more likely to riot rather than file lawsuits. The World Cup is a counter-example that demonstrates online ticketing, sans scalping and without frequent crashes is possible, under quite challenging conditions.

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