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Harris Legal Challenges & Live Nation Antitrust · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:16
Speaker 2: Vice President Kamala Harris sealed her status as the presumptive
0:20
Speaker 2: Democratic presidential nominee on Monday night, after crossing the magic
0:25
Speaker 2: number of nineteen hundred seventy six pledge delegates, more than
0:29
Speaker 2: enough to clinch the nomination, after an extraordinary two day
0:33
Speaker 2: blitz that saw Harris consolidate her party's backing to challenge
0:38
Speaker 2: Donald Trump in November.
0:40
Speaker 3: Over the next one hundred and six days, we are
0:43
Speaker 3: going to take our case to the American people, and
0:46
Speaker 3: we are going to win.
0:51
Speaker 2: President. Joe Biden had won ninety nine percent of the
0:54
Speaker 2: pledge delegates to August Democratic National Convention through a series
0:58
Speaker 2: of state primaries and calls earlier in the year, and
1:01
Speaker 2: his endorsement of Harris served as a rallying point for
1:04
Speaker 2: the party.
1:05
Speaker 1: I'm hoping you'll give every bit of your heart and
1:07
Speaker 1: soul that you gave to me to come on.
1:10
Speaker 2: The Vice president took over Biden's campaign, which was renamed
1:14
Speaker 2: Harris for President, giving her access to its war chest.
1:18
Speaker 2: Yet some Republicans, like House Speaker Mike Johnson, are raising
1:22
Speaker 2: the specter of lawsuits challenging Harris's place on the top
1:26
Speaker 2: of the ticket.
1:27
Speaker 3: We have fifty different systems in each of the states
1:31
Speaker 3: when it comes to presidential elections and choosing electors and
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Speaker 3: all the rest, And in some of the states there
1:35
Speaker 3: are impediments to just switching someone out like that. Remember
1:39
Speaker 3: that this claims to be the Party of Democracy, small
1:42
Speaker 3: d democracy right. Fourteen million people went through the process
1:45
Speaker 3: and chose this nominee, Joe Biden. Now a handful of
1:49
Speaker 3: people have gotten together and decided he's no longer suitable.
1:51
Speaker 3: That's not how this system works, or.
1:53
Speaker 2: As Johnson confused about how the system works. Joining me
1:57
Speaker 2: is elections law expert Richard Brefalt, professor at Columbia Law School.
2:02
Speaker 2: So she has more than enough pledged delegates to clinch
2:07
Speaker 2: the Democratic presidential nomination. So does that rule out any
2:11
Speaker 2: kind of an open convention or problems at the convention?
2:15
Speaker 4: I think it will turn on the rules. I mean,
2:17
Speaker 4: I don't think it precludes an open convention. Nobody seems
2:21
Speaker 4: to be running against her. I mean, the way delegates
2:24
Speaker 4: work in the Democratic Party, even if Biden were running,
2:27
Speaker 4: the nature of the pledge is it's like an honor
2:29
Speaker 4: pledge or a good faith pledge, so even the pledge
2:32
Speaker 4: delegates actually could have voted for someone else. So the
2:35
Speaker 4: fact that they've kind of announced a commitment to her,
2:38
Speaker 4: they're not legally pledged to her, so people could change
2:41
Speaker 4: their minds. I mean, I'm not saying that's going to happen,
2:43
Speaker 4: but I think the real issue is I think I
2:46
Speaker 4: saw Mary Ann Williamson might have declared. I think under
2:49
Speaker 4: the rules of the Democratic Party, anyone who wants to
2:51
Speaker 4: be nominated would need to support a three hundred delegates
2:55
Speaker 4: with no more than fifty from one state, And at
2:57
Speaker 4: this point it doesn't seem like there'll be any other candidate,
3:00
Speaker 4: so I think in that sense she has it wrapped up.
3:03
Speaker 4: None of the other prominent figures in Democratic parties have
3:05
Speaker 4: indicated any interest in running. I think at this point
3:07
Speaker 4: they've all endorsed her, so in some sense it's technically open.
3:11
Speaker 4: But she's going to be nominated, presumably, if not by acclamation,
3:15
Speaker 4: then by some overwhelming vote.
3:18
Speaker 2: One of the first questions is whether she can access
3:22
Speaker 2: Biden's campaign funds.
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Speaker 4: Right, so the money is sort of in three parts,
3:26
Speaker 4: and the only real issue is the money technically that
3:29
Speaker 4: went to the Biden Harris campaign. So the money that
3:32
Speaker 4: goes to the Democratic Party, of course she can use.
3:35
Speaker 4: And I think they also had a pack going, a
3:37
Speaker 4: superpack going, and of that of course they can use.
3:40
Speaker 4: The issue was the money that they went to Biden
3:42
Speaker 4: Harris specifically, and there I think it's a smaller amount,
3:46
Speaker 4: maybe like ninety million, but I'm not sure about that.
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Speaker 4: The assumption of all the campaigns and nance people I've
3:51
Speaker 4: spoken to is yet, as long as Harris continues to
3:54
Speaker 4: be on the ticket, it's money that she can use.
3:57
Speaker 4: The issue would have been more if the Democrats and
3:59
Speaker 4: not made someone else, then I think the Biden Harris
4:03
Speaker 4: committee would have had to transfer the money to the
4:05
Speaker 4: Democratic Party and the Democratic Party would have the money.
4:09
Speaker 4: But as long as she's the nominee, she is part
4:11
Speaker 4: of Biden Harris, which I think now has already been
4:14
Speaker 4: renamed Harris. So the assumption of just about every campaign
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Speaker 4: finance lawyer I know is that yes, she can use it.
4:20
Speaker 4: I think that some Republicans have made some noises about
4:23
Speaker 4: challenging that, but I think that the overwhelming assumption has
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Speaker 4: been the money went to her also it was going
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Speaker 4: to Biden and Harris. Harris is still running. So I
4:33
Speaker 4: think that the vast majority of campaing San's lawyers and
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Speaker 4: scholars believe that it's money she can use.
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Speaker 5: And I understand that even if it's challenged that the
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Speaker 5: Federal Election Commission takes so long to move that it
4:47
Speaker 5: would just be a question of paying fines later.
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Speaker 4: Not only it takes so long to move but you
4:52
Speaker 4: would need to get four votes, and there are three
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Speaker 4: Democrats who sit on the commission. There's a sixth member commission,
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Speaker 4: three Democrats and three Republicans, and on most major things
5:02
Speaker 4: they tend to vote on party mind, So it just
5:05
Speaker 4: seems right there's both the time that would take and
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Speaker 4: likely vote, and I think given the rules of the
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Speaker 4: federal election law, I think it will be very hard
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Speaker 4: for Republicans to sidestep the Commission and go directly to court.
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Speaker 4: Now somebody might try that, but I do think it's
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Speaker 4: kind of a lost cause given the court system today.
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Speaker 4: You never know one hundred percent. But I think, as
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Speaker 4: I said, the overwhelming belief is that the money she
5:27
Speaker 4: could use and would be very unlikely the Federal Election
5:30
Speaker 4: Commission would certainly during the course of the campaign, but
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Speaker 4: at any time come and say it was an improper use.
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Speaker 2: Speaker Mike Johnson says he expects they'll be litigation, saying
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Speaker 2: there are fifty different systems and that in some states
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Speaker 2: there are impediments to swapping candidates. Could there be losses
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Speaker 2: on the basis of the switch.
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Speaker 4: It seems like a totally ridiculous argument. The party doesn't
5:52
Speaker 4: have a candidate. The party doesn't have a candidate until
5:55
Speaker 4: they make a nomination. Biden was never nominated. Democratic convention
5:58
Speaker 4: has not met. The so called virtual role call we're
6:01
Speaker 4: talking about hasn't happened. The Democratic Party gets to decide
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Speaker 4: who the Democratic Party's nominee is, and they haven't made
6:09
Speaker 4: a choice yet. I don't think there'd be an issue
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Speaker 4: even if it was answered the nomination, because they still
6:14
Speaker 4: get to write their own rules. Just they make it
6:16
Speaker 4: clear Biden was never the nominee. He was the presumptive nominee,
6:21
Speaker 4: that he was never the nominee, and so there's no
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Speaker 4: challenge to make. There's no substitution, no ballots had been printed,
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Speaker 4: and so it's it's totally blowing smoke.
6:33
Speaker 2: So then what about the June twenty first memo from
6:36
Speaker 2: the Heritage Foundation, the conservative think tank, where it says
6:40
Speaker 2: it views swing states Georgia, Nevada, and Wisconsin as likely
6:44
Speaker 2: arenas for pre election legal challenges because they have specific
6:49
Speaker 2: procedures for withdrawal of a presidential nominee.
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Speaker 4: The only way there would be anything is that Biden
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Speaker 4: had actually been nominated, but Biden wasn't nominated. It doesn't
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Speaker 4: matter that Biden won primary there because many times a
7:01
Speaker 4: candidate who's won primary and there's upstates, whose is the nomination.
7:05
Speaker 4: So the fact that Harris didn't win the primary any
7:08
Speaker 4: of the states is irrelevant. Many candidate who are then
7:11
Speaker 4: ultimate nominees lost some primaries, they still got to be
7:14
Speaker 4: on the ballots of the states where they lost the primary.
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Speaker 4: So I think they might have some argument that he'd
7:19
Speaker 4: actually been nominated and she was being put in to
7:22
Speaker 4: replace him, but he was never nominated.
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Speaker 2: Which do you see any other legal complications of her candidacy.
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Speaker 4: No, I don't, I don't. I mean, I think again,
7:33
Speaker 4: there's a potential potential challenge on the money when it
7:36
Speaker 4: goes from Biden Harris to Harris somebody else. But I
7:39
Speaker 4: do think there it's still Harris. I think that challenge
7:43
Speaker 4: is pretty weak. There's absolutely no challenge on her being
7:47
Speaker 4: on the ballot because you say, one more time, Biden
7:50
Speaker 4: was never the nominee, so there's no issue about changing nominees.
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Speaker 4: He hadn't been nominated yet, and you know it was
7:58
Speaker 4: not likely that he would have defeves of the convention.
8:01
Speaker 4: But there have been contested conventions. I mean, maybe the
8:04
Speaker 4: least truly contested one was in nineteen seventy six when
8:08
Speaker 4: Ronald Reagan was trying to unseae Gerald Ford. He came close,
8:12
Speaker 4: and if he had done that, he would have been
8:15
Speaker 4: the nominee. And the fact that had Ford with the
8:17
Speaker 4: incumbent president and had won a bunch of states and
8:19
Speaker 4: primaries would have been irrelevant.
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Speaker 2: So do you have any idea what Mike Johnson is
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Speaker 2: talking about?
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Speaker 4: Then I have no idea what he's talking about. I mean,
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Speaker 4: I mean, some of the noise he's making is that
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Speaker 4: it's undemocratic, small d democratic. But the parties get to
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Speaker 4: write their own rules about who the nominees are. Supreme
8:35
Speaker 4: Court has said that, going back to contested conventions in
8:37
Speaker 4: the nineteen seventies, this is the parties are private organizations.
8:41
Speaker 4: They get to write their own rules and to choose
8:43
Speaker 4: their own nominees. And it looks like they're going to
8:46
Speaker 4: choose to nominate Harris. If they do nominate Harris, she's
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Speaker 4: the nominee. She's the one who gets on the ballot.
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Speaker 4: And if for some reason they choose to nominate somebody
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Speaker 4: else because something else happened in the next three weeks,
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Speaker 4: that person would be the nominee.
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Speaker 2: And what do you think about Johnson's argument that this
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Speaker 2: violates democratic principles, that voters chose Biden in the primaries
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Speaker 2: and now they're getting Harris.
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Speaker 3: There's a reason it's unprecedented. You don't just, you know,
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Speaker 3: steamroll the rules in the process because you decide that
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Speaker 3: your candidate is no longer suitable.
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Speaker 4: I mean, I think, for one thing, Biden was always
9:19
Speaker 4: running with Harris as as his teammate. So to some extent,
9:22
Speaker 4: they're still getting one of their choices. But I think
9:25
Speaker 4: in the end, remember, the winner of the primary in
9:27
Speaker 4: any one state is not guaranteed or in many states.
9:30
Speaker 4: I mean, going back to nineteen sixty eight, Hubert Humphrey
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Speaker 4: didn't run any primaries and he was the nominee. Eugene
9:36
Speaker 4: McCarthy won more primaries than Hubert Humphrey, but Hubert Humphrey
9:40
Speaker 4: was the nominee.
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Speaker 2: Everyone agrees on one thing. This is unprecedented, But is
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Speaker 2: there anything in presidential history that would be analogous.
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Speaker 4: It's hard to make an analogy where there was somebody
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Speaker 4: who was so clearly the presumptive nominee and then who
9:57
Speaker 4: pulls out at the last minute. There have been a
9:59
Speaker 4: couple of a life where a candidate dies but that
10:02
Speaker 4: person's already been nominated, and then there's a scrambled to
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Speaker 4: place the candidate that has happened, But I can't recall
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Speaker 4: anything like this where there was somebody who had won
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Speaker 4: all the primaries, was the presumptive nominee and then decides no,
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Speaker 4: I'm not going to run, and the party quickly rallies
10:19
Speaker 4: around another person. But again, this is the person who
10:22
Speaker 4: was his number two. It's not a challenger who is
10:25
Speaker 4: going to be chosen. So it is unprecedented, but it's utterly,
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Speaker 4: entirely consistent with the rules. Maybe just leave it at that.
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Speaker 4: Is that again, just to make it clear, he was
10:37
Speaker 4: never the nominee, so they're not replacing a nominee. They're
10:40
Speaker 4: just picking a nominee. And when people were donating money,
10:44
Speaker 4: they were donating money to Biden Harris. It looks like
10:47
Speaker 4: they're still going to get Harris.
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Speaker 2: Thanks Rich for helping us clear up the confusion with
10:53
Speaker 2: facts and legal analysis. That's Professor Richard Ruflt. Of Columbia
10:57
Speaker 2: Law School coming up next on the Bloomberg Lall Show.
11:01
Speaker 2: Remember back in late May, when the Justice Department in
11:03
Speaker 2: more than two dozen states filed a major anti trust
11:07
Speaker 2: lawsuit seeking to break up Ticketmaster's owner Live Nation. Well,
11:12
Speaker 2: Live Nation has filed its first answer to that suit,
11:16
Speaker 2: and we'll tell you about it. I'm June Grosso and
11:18
Speaker 2: this is Bloomberg.
11:22
Speaker 1: Ticketmaster can impose a seemingly endless list of fees on fans.
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Speaker 1: Those include ticketing fees, service fees, convenience fees, platinum fees,
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Speaker 1: price master fees, per order fees, handling fees, and payment
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Speaker 1: processing fees, among others.
11:43
Speaker 2: Anyone who's bought concert tickets from Ticketmaster can probably relate
11:48
Speaker 2: to Attorney General Merrick Garland's description of the seemingly endless
11:52
Speaker 2: fees to purchase tickets. Garland said it was time for
11:56
Speaker 2: fans and artists to stop paying the price for Live
11:59
Speaker 2: Nations when monopoly. When the Justice Department in more than
12:02
Speaker 2: two dozen states filed a major anti trust lawsuit in
12:06
Speaker 2: late May, seeking the breakup of Ticketmaster's owner, Live Nation Entertainment.
12:12
Speaker 1: Live Nation suffocates its competition using a variety of tactics,
12:17
Speaker 1: from acquisitions of smaller regional promoters and venues to threats
12:22
Speaker 1: and retaliation to agreements with rivals designed to neutralize them.
12:27
Speaker 1: This has included acquiring or co opting key independent promoters.
12:33
Speaker 2: Live Nation has denied its monopoly, blaming rising ticket prices
12:38
Speaker 2: on things like increasing production costs, artists popularity, and twenty
12:43
Speaker 2: four to seven online ticket scalping. But now Live Nation
12:47
Speaker 2: has offered its first official response to the anti trust
12:50
Speaker 2: claims in a letter to the federal judge overseeing the litigation,
12:54
Speaker 2: joining me to discuss the strength of the case. And
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Speaker 2: that response is antitrust ECXI, spurred Harry First, a professor
13:01
Speaker 2: at NYU Law School. Harry start by telling us about
13:05
Speaker 2: the Department of Justice's lawsuit against Live Nation.
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Speaker 6: Okay, so this is in some ways basically a suit
13:12
Speaker 6: to correct a bad mistake the Justice Department made in
13:16
Speaker 6: twenty ten. So it's taken them a while, but eventually
13:20
Speaker 6: anti trust enforcers are trying to get it right. So
13:23
Speaker 6: what happened was in two thousand and nine, Ticketmaster and
13:27
Speaker 6: Live Nation decided to merge, and the Justice Department looked
13:32
Speaker 6: at it. Ticketmaster, of course, sells ticketing services to major
13:37
Speaker 6: venues around the country what's now called primary ticketing services.
13:41
Speaker 6: You know, the secondary markets weren't so developed then, I
13:44
Speaker 6: don't think, you know, reselling, and Live Nation was the
13:47
Speaker 6: biggest promoter at the time and was about to sort
13:51
Speaker 6: of entered the ticketing market. But basically this was what's
13:55
Speaker 6: referred to as a vertical merger, not really competitors or
13:59
Speaker 6: not much competitor yet, but at the time, the Justice
14:03
Speaker 6: Department understood what was going on. So Live Nation, which
14:08
Speaker 6: was a big promoter and booker of venues, wanted to
14:14
Speaker 6: put its shows into venues that would use Ticketmaster ticketing.
14:20
Speaker 6: So the venues knew that if they wanted to get
14:24
Speaker 6: you know, a really good show, the best way to
14:27
Speaker 6: do it was to use Ticketmaster because they really needed
14:31
Speaker 6: Live Nations talent. So Live Nation, as a promoter of
14:36
Speaker 6: you know, major tours, thought that this tie up would
14:41
Speaker 6: sort of help both businesses, as did Ticketmaster. It would
14:45
Speaker 6: give Ticketmaster and edge you know, over competitors in the
14:49
Speaker 6: ticketing business, and it would increase Live Nations revenues because
14:53
Speaker 6: now they owned a ticketing company. So control the talent,
14:58
Speaker 6: control entry or choice of the venues, and you control ticketing.
15:04
Speaker 6: So at the time, the Justice Department knew this, there
15:07
Speaker 6: was testimony about this, and also Ticketmaster had, you know,
15:12
Speaker 6: in major venues, a major share of the market, maybe
15:16
Speaker 6: seventy or so percent. You can argue over what exactly
15:20
Speaker 6: it was. So they had a dominant or monopoly position
15:23
Speaker 6: at the time. But instead of saying you can't merge,
15:28
Speaker 6: they said, hey, go ahead and merge. Okay, we've got
15:32
Speaker 6: some conditions for you. First, help a company is trying
15:35
Speaker 6: to get into the ticketing business, get into it through
15:38
Speaker 6: some software. Okay, that was one idea. The second thing
15:41
Speaker 6: is we'll tell Live Nations that they can't condition their talents,
15:46
Speaker 6: you know, with venues on using Ticketmaster, they can't make
15:50
Speaker 6: that a condition, and they can't retaliate against the venue
15:54
Speaker 6: if that venue subsequently decides to use a ticketing company.
15:58
Speaker 6: So no conditioning, no retaliation. Fine. We think this is wonderful.
16:02
Speaker 6: Parties merge. The new entrant turns out never does well
16:07
Speaker 6: and almost from the beginning they violate the decree, and
16:11
Speaker 6: in fact, they don't have to actually violate it because
16:14
Speaker 6: every promoter, every venue owner knows what the deal is.
16:20
Speaker 6: You know, give Live Nation the ticketing revenue, you're more
16:24
Speaker 6: likely you're going to get the good tours into your venue.
16:27
Speaker 6: And there's a lot of competition for that. So this
16:31
Speaker 6: decree never worked. It didn't work because the parties violated.
16:35
Speaker 6: There were later proceedings because it looked like they were
16:39
Speaker 6: violating it, and then kame Taylor Swift.
16:42
Speaker 2: Referring of course to the website crashing, et cetera, et cetera,
16:46
Speaker 2: et cetera.
16:47
Speaker 6: Oh, that was the push and hearings in the Senate,
16:51
Speaker 6: Amy Klobashar and so forth. That was the push that
16:54
Speaker 6: finally pushed the Justice Department. And this has been a
16:57
Speaker 6: pretty aggressive Justice Department on any trust to say, you know,
17:03
Speaker 6: just really, almost fifteen years, it just didn't work and
17:08
Speaker 6: it's time to do something about it. So the lawsuit
17:11
Speaker 6: we see now is the Justice Department saying, you know,
17:15
Speaker 6: Ticketmaster has a monopoly position in primary ticketing services, and
17:21
Speaker 6: it's solidified by this, you know, being owned by Live Nation.
17:26
Speaker 6: We've got to stop it, declare them monopoly, and.
17:30
Speaker 2: Then break them up is tying an anti trust term?
17:33
Speaker 2: Will you explain what it means? In this context?
17:37
Speaker 6: Tying is an anti trust term. And so there is
17:40
Speaker 6: in the Justice Department's complaint, which is joined by a
17:43
Speaker 6: lot of states. By the way, there is in this
17:46
Speaker 6: complaint not just a complaint about the monopolization of the
17:50
Speaker 6: ticketing markets and large venues. There's a complaint about a
17:54
Speaker 6: tying arrangement in here that involves the talent itself. So
17:59
Speaker 6: a tying arrangement is basically, you have two products. A
18:03
Speaker 6: seller says, if you want my A product, guess what
18:06
Speaker 6: you've got to take B So you know, I don't know.
18:09
Speaker 6: If you want my car, you got to take my tires.
18:11
Speaker 6: There's always a question of what two products are. But
18:14
Speaker 6: that's the basic of a tying arrangement, and the Justice
18:17
Speaker 6: Department alleges that talent knows. There's this talent promoting services
18:22
Speaker 6: market that Live Nation also is involved in. So if
18:27
Speaker 6: you want those promotion services, you've got to be sure
18:30
Speaker 6: to be booked into the proper venues that, of course
18:33
Speaker 6: are using Ticketmaster. This is part of the complaint, and
18:38
Speaker 6: it's a part that the defendant Ticketmaster a lot of
18:41
Speaker 6: nation says it might move to dismiss, but frankly, it
18:46
Speaker 6: seems like a rather minor part of the complaint. The
18:49
Speaker 6: big part is their monopolization claim, and the big relief
18:54
Speaker 6: is to break up the company. So tying can be
18:57
Speaker 6: a problem, and it's historically a problem, but it's not
19:02
Speaker 6: the central problem of this piece of litigation.
19:06
Speaker 2: And what you're referring to there is that they're at
19:09
Speaker 2: the motion to dismiss stage, and the judge asked Live
19:13
Speaker 2: Nation to identify issues that it might contemplate a motion
19:18
Speaker 2: to dismiss on. Live Nation's letter in response was pretty narrow.
19:24
Speaker 2: What did you think of the response?
19:29
Speaker 6: Not much? I mean, okay, it involves a little more
19:36
Speaker 6: factual analysis of who's force to do. Was basically a
19:41
Speaker 6: compelled arrangement, and in fact, it came out of cases
19:45
Speaker 6: where a company had a machine that deposited salt tablets
19:51
Speaker 6: into canned products, and they said, well, if you want
19:54
Speaker 6: this machine, we have a patent on so you've got
19:57
Speaker 6: to have a machine. You've got to buy salt from.
20:00
Speaker 6: Salt was the tied product, and the machine, which they
20:05
Speaker 6: had some monopoly power over, was the tieing product, and
20:09
Speaker 6: that's where the idea came that this was anti competitive
20:12
Speaker 6: because it's stopped competition in the B market, the tide
20:17
Speaker 6: product market salt. So, you know, is this a problem here?
20:21
Speaker 6: Maybe this is going to depend on the facts, but
20:23
Speaker 6: not the critical problem. So I was a little They
20:27
Speaker 6: haven't made their motion yet and it's a little I
20:29
Speaker 6: don't know what they're doing with this particular part. They
20:32
Speaker 6: are trying to move the case to a different court,
20:35
Speaker 6: so maybe they don't want to, you know, reveal their
20:39
Speaker 6: entire legal strategy at the moment. I really don't know,
20:42
Speaker 6: but they're trying to change where the case is going
20:45
Speaker 6: to be tried from New York to DC.
20:48
Speaker 2: Yeah, why do they want to change? I mean, do
20:50
Speaker 2: they think they'll have more luck in DC than in
20:53
Speaker 2: New York?
20:54
Speaker 6: I knew you were going to ask me that. And
20:58
Speaker 6: I'm not really sure why they want to change. It's
21:01
Speaker 6: going to change the venue, as you know, I'm not
21:03
Speaker 6: really sure why they want to do that flow things down.
21:07
Speaker 6: Maybe they're dissatisfied with this particular judge. They know who
21:11
Speaker 6: they've got here. Maybe the docket is slower in DC.
21:15
Speaker 6: They've got a lot of cases there. Part of it
21:18
Speaker 6: may be related to their effort to dismiss the state claims.
21:23
Speaker 6: So the states are asking for damages, not clear which states,
21:27
Speaker 6: but under their state law. And there's now precedent in
21:31
Speaker 6: the DC Circuit which takes a somewhat dim view of
21:35
Speaker 6: these kinds of state claims in any trust cases case
21:40
Speaker 6: that involves the Facebook litigation in the District of Columbia,
21:45
Speaker 6: So maybe they feel they have a better chance of
21:48
Speaker 6: getting those state claims dismissed there. And the state claims
21:52
Speaker 6: also come with a request for a jury trial. So
21:57
Speaker 6: hard for me to know exactly, you know, what all
22:01
Speaker 6: is going on. And I mean, obviously people don't ask
22:04
Speaker 6: for change of venue unless they think they'll be better
22:07
Speaker 6: off someplace else. But I'm not quite sure why they
22:10
Speaker 6: think that.
22:11
Speaker 2: And so in this letter to the judge they try
22:15
Speaker 2: to knock out the state claims in different ways. Are
22:19
Speaker 2: they trying to avoid a jury trial in a case
22:22
Speaker 2: like this where I mean, who hasn't been aggrieved by
22:28
Speaker 2: ticket Master?
22:29
Speaker 6: You mean you think the jury might not be too sympathetic,
22:31
Speaker 6: That's what I'm thinking. But that's what I'm thinking.
22:35
Speaker 2: Whether you're a fan of Taylor Swift, Bruce Bringsteen all.
22:38
Speaker 6: The way back, right, Yeah, that's a good instinct. I
22:42
Speaker 6: think on this they really would not want to have
22:45
Speaker 6: to present this case to a jury. And the claim
22:47
Speaker 6: for damages seems it's a little vague, which the defendant
22:52
Speaker 6: does say, and I think correctly, you know, not that
22:55
Speaker 6: they can't be made less vague. But if there's not
22:58
Speaker 6: a claim for damages, then the case gets tried before
23:02
Speaker 6: a judge, and you just hope, I guess that the
23:05
Speaker 6: judges never bought a ticket that's a stress to an event,
23:11
Speaker 6: So you know that's part of it. Now. If it
23:13
Speaker 6: doesn't get moved them, they're gonna make the same claims
23:16
Speaker 6: in New York. And you know they've already cited the
23:19
Speaker 6: DC circuit case. But you know it's stronger if it's
23:23
Speaker 6: in a circuit in which you're litigating, not in a
23:25
Speaker 6: sister circuit.
23:27
Speaker 2: Stay with me. Harry, coming up next on the Bloomberg
23:30
Speaker 2: Law Show, Live Nation says the lawsuit won't solve the
23:34
Speaker 2: issues fans care about and how antitrust enforcement will change
23:39
Speaker 2: with a different administration. In January, we're discussing the Justice
23:45
Speaker 2: Department's anti trust suit against ticket Master and its parent company,
23:48
Speaker 2: Live Nation, accusing them of running an illegal monopoly over
23:52
Speaker 2: Live concerts. I've been talking to anti trust expert Harry First,
23:57
Speaker 2: a professor at n YU Law School. The Nation's legal
24:01
Speaker 2: team was saying that the government has no right to
24:03
Speaker 2: force it to do business with competing promoters in buildings
24:08
Speaker 2: that it owns.
24:09
Speaker 6: I guess, you know, you can say it. They can't
24:12
Speaker 6: force them to do business, but they're forcing others to
24:16
Speaker 6: do business. They're forcing their customers, they're forcing the artists
24:21
Speaker 6: to do business. Now they claim that the artists don't
24:24
Speaker 6: have a say on which venue is used. I don't
24:26
Speaker 6: know enough of the facts on that particular wrinkle of
24:30
Speaker 6: the case. My guess is that in practice it's a
24:33
Speaker 6: lot more complicated. But I think the tying part is
24:37
Speaker 6: whatever the merits of their claim, which is overdrawn as
24:42
Speaker 6: a bit, But whatever those merits, it doesn't really go
24:45
Speaker 6: to the heart of what the competition problem is here
24:49
Speaker 6: and what the government is asking for, which does go to,
24:53
Speaker 6: you know, to what for them a very successful business model,
24:57
Speaker 6: even if it's not a great business model from the
25:00
Speaker 6: point of view of consumers or venues which you know,
25:03
Speaker 6: are forced to use ticket masters not so great ticketing services.
25:09
Speaker 2: Live Nation claims that this lawsuit won't solve what fans
25:15
Speaker 2: care about most, relating to ticket prices, service fees, and
25:18
Speaker 2: access to in demand shows. They say that factors from
25:22
Speaker 2: increasing production costs to artist's popularity to twenty four to
25:25
Speaker 2: seven online ticket scalping are responsible for higher ticket prices.
25:31
Speaker 6: Well, you know, I mean, it won't cure cancer either,
25:34
Speaker 6: but I mean that's sort of in some ways it's
25:36
Speaker 6: a ridiculous statement. Of course, it doesn't cure those other things.
25:40
Speaker 6: But if a ticketmaster is able to charge monopoly prices
25:44
Speaker 6: for ticketing services, they're charging higher prices and this is
25:48
Speaker 6: all folded into what consumers pay, so you know, they
25:52
Speaker 6: don't charge highers prices. That's the argument for you know,
25:56
Speaker 6: what a monopolist does and consumers pay it. So the
26:00
Speaker 6: idea that it won't completely solve high prices, of course,
26:05
Speaker 6: that's true. There are a lot of other factors that
26:08
Speaker 6: go into you know, what it costs you to go
26:11
Speaker 6: to one of these events, and you know ticketing is
26:15
Speaker 6: one of them, but it is one of them. So
26:18
Speaker 6: that seems to me a sort of argument that is
26:20
Speaker 6: more made for newspapers than really for a serious legal
26:24
Speaker 6: argument court.
26:26
Speaker 2: You mentioned DOJ wants a breakup of the company, and
26:29
Speaker 2: that's a drastic remedy. But I've heard it said, well,
26:31
Speaker 2: it's drastic, but if it works anywhere, it should be here.
26:35
Speaker 6: Yeah, I mean, in many ways this is I mean,
26:38
Speaker 6: I don't know for sure because they don't know the
26:40
Speaker 6: inner workings of how integrated the firms are. But this
26:43
Speaker 6: should be a case where it's relatively easy, relatively being
26:48
Speaker 6: the keyword to break the company up because they do
26:52
Speaker 6: operate as at least public Facing has two separate companies.
26:56
Speaker 6: They do two separate things. They're in separate market that
27:00
Speaker 6: are linked, but they used to operate separately before and
27:04
Speaker 6: presumably could operate separately again. So I think you're right.
27:09
Speaker 6: This is a case where, you know, restructuring of the
27:11
Speaker 6: company sounds like it is doable. The question is whether
27:15
Speaker 6: that's going to change Ticketmaster's monopoly position or not. And
27:21
Speaker 6: that's sort of the next step. So you could break
27:23
Speaker 6: them up, but you know, how much will that increase
27:26
Speaker 6: competition in itself?
27:28
Speaker 2: Can live Nation use the fact that the DOJ allowed
27:32
Speaker 2: the merger to proceed in the first place, and then
27:36
Speaker 2: agreed to extend the initial consent decree as recently as
27:40
Speaker 2: twenty nineteen, even after it found that live nation repeatedly
27:44
Speaker 2: violated the decree.
27:47
Speaker 6: Can they use that as an argument? They are doing that,
27:50
Speaker 6: I think, and they will make that argument. Is it
27:52
Speaker 6: a good legal argument? I really don't think so. There
27:56
Speaker 6: is not what's called in the stoppel against the government.
27:59
Speaker 6: The government is able to and free to change its
28:04
Speaker 6: policy as it sees how it works. There are older
28:08
Speaker 6: cases in which you know, the government accepted this particular remedy,
28:12
Speaker 6: the remedy didn't work out. The district court judge in
28:15
Speaker 6: fact in that older case said, see, I can't change
28:18
Speaker 6: this decree. You entered it, and the Supreme Court said, no,
28:23
Speaker 6: you can. It didn't work. Ten years you had a
28:26
Speaker 6: chance for this to work and it didn't bring competition.
28:29
Speaker 6: Ten years is long enough. So I don't think in
28:32
Speaker 6: the end that's really a good argument. And I do
28:35
Speaker 6: disagree with the idea that the Justice Department approved the merger.
28:40
Speaker 6: Justice Department never approves mergers. It decides what it will
28:45
Speaker 6: do in terms of bringing a lawsuit, and it may
28:49
Speaker 6: decide not to sue, or it may decide to settle
28:52
Speaker 6: a claim in a particular way, but it doesn't approve it.
28:55
Speaker 6: Everybody knows it, and you know, things change and don't
29:00
Speaker 6: work out, and they don't bind successive governments forever.
29:05
Speaker 2: So it sounds like you think that the Justice Department
29:08
Speaker 2: has the better case here.
29:10
Speaker 6: I do. I do so, of course, as they say,
29:14
Speaker 6: we'll see what happens. But you know, you never know
29:17
Speaker 6: in litigation. You know, they're still going to have to
29:19
Speaker 6: prove exactly what the market is and what Ticketmaster's market
29:24
Speaker 6: share is, and you know, they've got to distinguish between
29:26
Speaker 6: the primary market and resale market and what Live Nation's
29:31
Speaker 6: position is, and you know, whether there's a large arena market.
29:34
Speaker 6: There are a lot of technical things that you know,
29:37
Speaker 6: still have to be worked out in the context of
29:40
Speaker 6: the litigation. But on the surface, at least on of course,
29:44
Speaker 6: there's only one side. We have the you know, the
29:46
Speaker 6: complaint filed by the Justice Department and a large number
29:51
Speaker 6: of states, so we have one view of the allegations.
29:54
Speaker 6: But the defendants certainly have defended this position, and you know,
30:01
Speaker 6: their position in this industry for a long time. They've
30:04
Speaker 6: faced these allegations. So we'll see.
30:07
Speaker 2: Do you see a star studded cast at the trial.
30:12
Speaker 6: I don't know. It's a great question. I hadn't really
30:15
Speaker 6: thought about that. I think even judges can be starstruck
30:18
Speaker 6: by Taylor Swift, so I don't know. The Attorney General
30:22
Speaker 6: is apparently a big swiftye.
30:23
Speaker 2: So really I go more for Springsteen. But still, I mean,
30:27
Speaker 2: how long could this take?
30:29
Speaker 5: Years?
30:30
Speaker 6: So look, looking at it from the defendant's point of view,
30:32
Speaker 6: the longer the better. So they're making money off of
30:35
Speaker 6: this deal, and you know, if the Justice Department's right,
30:39
Speaker 6: they shouldn't be in any hurry to get through it
30:41
Speaker 6: because while it's going on, they're still in a great
30:44
Speaker 6: market position and still getting those high prices you know,
30:48
Speaker 6: in ticketing services. So you know, I don't expect them
30:51
Speaker 6: to be asking for quick resolution, and they're not. They're
30:55
Speaker 6: trying to move the trial. They're filing letters rather than
30:58
Speaker 6: motions to the smith. So it will be a while.
31:02
Speaker 6: Anti trust litigation tends to take a while, and you know,
31:06
Speaker 6: it could be years or at least a year. There's
31:10
Speaker 6: a lot to do and a lot to go through
31:12
Speaker 6: their economy, know, all sorts of things, and there's an election.
31:16
Speaker 2: So that brings me to my big picture question. You know,
31:20
Speaker 2: you mentioned the Biden administration has been i'll say incredibly
31:23
Speaker 2: aggressive in the anti trust area, bringing lawsuits. If there's
31:28
Speaker 2: a Trump administration, will it be very different?
31:31
Speaker 6: My first answer is, whichever administration takes over in January
31:37
Speaker 6: of twenty twenty five, things will be different. Things always
31:40
Speaker 6: are different. There'll be different leadership, it will stagger is
31:44
Speaker 6: sort to be feathered in in a way at the
31:47
Speaker 6: Federal Trade Commission as terms run out or maybe commissioners resign,
31:51
Speaker 6: they'll be I assume a new head of the Anti
31:55
Speaker 6: Trust Division, There'll be a new attorney general. It's going
31:58
Speaker 6: to be a new administration. And will they do things
32:00
Speaker 6: exactly as things are done now? Presumably not. They'll put
32:04
Speaker 6: their own stamp on it. What a Trump administration stamp
32:08
Speaker 6: might be, I really don't know, because there are contradictory
32:13
Speaker 6: policy themes running around within that thing that we call
32:20
Speaker 6: MAGA or whatever we want to call it. So in
32:23
Speaker 6: some ways anti trust under Trump did some heavy enforcement things,
32:28
Speaker 6: and in some ways they didn't. So it's hard to
32:31
Speaker 6: know where that trend is going to go and how
32:35
Speaker 6: it might show up. But of course you would predict
32:38
Speaker 6: things will likely be different. Would they be different with
32:41
Speaker 6: this case? Would this case settle more easily with the
32:45
Speaker 6: new administration? So that too is that's hard to know.
32:49
Speaker 6: I think it's a good, solid anti trust case. Is
32:51
Speaker 6: not a crazy any trust case. Not crazy in the
32:54
Speaker 6: sense that it's not trying something that's unusual for anti trust.
33:00
Speaker 6: It's pretty much in you might say, the wheelhouse of
33:03
Speaker 6: any trust and what it should be. So you know,
33:07
Speaker 6: we'll see. But remember the original deal was in the
33:09
Speaker 6: Obama administration, so it's hard to pin labels on these,
33:14
Speaker 6: but we do. But we do, I know, because it
33:16
Speaker 6: makes it fun.
33:17
Speaker 2: Well, it's always fun to talk to you and always enlightening.
33:20
Speaker 2: Thanks so much. That's Professor Harry First of NYU Law School.
33:25
Speaker 2: And that's it for this edition of the Bloomberg Law Podcast.
33:28
Speaker 2: Remember you can always get the latest legal news by
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Speaker 2: subscribing and listening to the show on Apple Podcasts, Spotify,
33:35
Speaker 2: and at Bloomberg dot com, slash podcast, Slash Law. I'm
33:39
Speaker 2: June Grosso and this is Bloomberg