Disgruntled Taylor Swift fans have now joined a growing list of critics of the Department of Justice’s (DOJ) antitrust enforcement. Critics say the company has abused its power and created a monopoly over the live entertainment industry.
In 2010, the Department of Justice actually signed off on the merger of Live Nation and Ticketmaster. Under the terms of a consent decree between the Justice Department and Live Nation, the company was barred from threatening venues with the loss of access to their tours if they used alternative ticket providers. While that provision was set to expire in 2020, the Justice Department extended it until 2025 due to Live Nation’s repeated violations.
Ticketmaster’s monopoly on the concert ticket market is just one example of how the Justice Department is failing consumers. Instead of addressing the competition concerns surrounding Ticketmaster or Big Tech, the latest Justice Department case prevented the two book publishers from merging.
US antitrust laws
The purpose of the federal antitrust laws is to deter efforts by businesses to reduce competition in the marketplace or to create or maintain monopolies. The United States passed its first antitrust law in 1880. The Sherman Act prohibits all agreements and conspiracies in restraint of interstate commerce and trade, such as price fixing, market allocation, boycotts, and bid rigging.
As stated by the Supreme Court in Northern Pak. Ry. Company v. United States, 356 US 1, 4 (1958), the Sherman Act “rests on the premise that the unrestrained interplay of competitive forces will result in 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 to preserve our democratic political and social institutions.”
Another federal law, the Clayton Act, prohibits mergers, certain exclusive arrangements, and price discrimination that would substantially lessen competition or create a monopoly. The Clayton Act was amended in 1976 by the Hart-Scott-Radin Antitrust Improvement Act, which required companies planning major mergers or acquisitions to notify the government in advance of their plans.
The Department of Justice is charged with enforcing both the Sherman Act and the Clayton Act and may do so through civil and criminal proceedings. The Federal Trade Commission (FTC) can also investigate and file civil lawsuits against companies that violate federal antitrust laws. State attorneys general and private citizens also have the ability to prosecute certain antitrust violations.
Criticism of weak law enforcement by the Ministry of Justice
As the Taylor Swift ticket fiasco made clear, when competition is stifled, consumers usually suffer. Antitrust authorities, such as the Department of Justice, must be more assertive in challenging anticompetitive behavior and consolidation.
Earlier this year, Jonathan Kanter, assistant attorney general for the Justice Department’s antitrust division, said the Justice Department could handle the challenge. declaring that “the era of lax enforcement is over and a new era of vigorous and effective antitrust enforcement has begun.” According to Kanter, the Justice Department should be reviewing cases rather than relying on consent decrees, which often do not preserve competition.
“If we don’t open a case, the law will stand. Even as our economy undergoes revolutionary change, an over-reliance on settlement will leave us under yesterday’s law,” Kanter argued. “We need to bring cases to empower the courts to grapple with the realities of today’s markets and ensure that antitrust laws meet the goals of today’s economy.”
Unfortunately, the Justice Department’s efforts to increase enforcement have run into obstacles. This fall, the agency lost three cases to stop mergers in the medical technology, agriculture and defense contractor industries. In defense of the Ministry of Justice, it should be said that in recent years the courts have set a very high bar of evidence, which makes it difficult to win in antitrust courts. However, this does not mean that the Justice Department should only deal with slam dunk cases. Agencies tasked with antitrust enforcement also need adequate funding and resources to succeed. Funding levels are 18% lower than in 2000, despite increased concentration and market power.
Finally, both courts and antitrust authorities must recognize that the US economy has evolved over time. In the case of Ticketmaster, concert tickets are now sold exclusively online. Other areas have seen significant changes due to advances in technology and the speed of data exchange.
Antitrust law, including the legal analysis and models used to decide cases, should follow suit, reflecting the competitive realities of today’s markets, with constant attention to the protection and development of competition. Given that it will take some time for case law to develop, Congress can accelerate efforts by making significant changes to the antitrust laws that strengthen antitrust enforcement.
