Live Nation Seeks Dismissal of DOJ Antitrust Allegations Over Amphitheater Tying Practices
Live Nation’s attorneys have requested that the judge overseeing the company’s antitrust case dismiss the Department of Justice’s (DOJ) allegations. The DOJ claims that Live Nation engages in illegal tying arrangements to control its amphitheaters, but Live Nation argues it is under no obligation to allow rival promoters to use its owned or managed venues.
Billboard.com reported that Alfred C. Pfeiffer, Live Nation’s co-lead trial counsel from Latham Watkins, addressed these points in a July 17 letter to U.S. District Judge Arun Subramanian. Pfeiffer contends that the practice described as a “refusal to deal” is standard in the concert industry and is safeguarded by Supreme Court precedent.
Pfeiffer’s letter references a 2004 Supreme Court ruling involving Verizon, asserting that the Sherman Act does not limit a private business’s right to choose with whom it will deal. “As a general matter, the Sherman Act does not restrict the long-recognized right of a (defendant) engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal,” Pfeiffer quoted from the ruling.
Relying on this ruling, Live Nation argues it has no obligation to assist new market entrants or support its competitors' growth, highlighting that the freedom to refuse dealings with rivals, except in the rarest circumstances, is a fundamental antitrust principle.
The concept of "refusing to deal" has been addressed by the U.S. Supreme Court in several landmark cases, establishing a precedent that generally allows businesses the discretion to choose with whom they conduct business. This precedent is rooted in the principle that the Sherman Act does not compel companies to assist competitors or engage in business dealings they prefer to avoid.
One of the most significant cases related to this doctrine is the 2004 Supreme Court decision in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP. In this case, the Court ruled that Verizon’s failure to share its network infrastructure with competitors did not violate the Sherman Act. The decision reinforced the idea that companies are not obligated to deal with rivals, particularly when such dealings could undermine their competitive position.
Justice Antonin Scalia, writing for the majority in the Trinko case, stated, "The Sherman Act is not a tool for promoting competition between firms by requiring firms to share their competitive advantages with rivals." The Court emphasized that compelling a firm to deal with competitors could reduce the incentive for innovation and investment in new infrastructure.
In the Live Nation antitrust case context, the company’s attorneys have drawn parallels to the Trinko decision, arguing that Live Nation's refusal to allow rival promoters to use its amphitheaters is protected under the same legal principles. Live Nation contends that it is under no legal obligation to provide its competitors with access to its venues, as doing so would undermine its competitive strategy and business interests.
Live Nation’s defense hinges on the assertion that the Supreme Court's precedent affirms its right to control how it utilizes its properties and resources. The company's legal team argues that the DOJ’s allegations fail to recognize this fundamental antitrust principle and that the company’s business practices are consistent with the rights upheld in previous Supreme Court rulings.
The DOJ’s complaint against Live Nation accuses the company of engaging in illegal tying arrangements by forcing artists to use Live Nation as their promoter to access its amphitheaters. However, Live Nation argues that such arrangements are a legitimate exercise of its business discretion. By invoking the Supreme Court’s ruling in Trinko, Live Nation aims to demonstrate that its practices are within legal bounds and that the DOJ’s interpretation of antitrust laws overreaches established precedent.
The Supreme Court’s precedent on "refusing to deal" plays a crucial role in Live Nation’s legal strategy against the DOJ’s antitrust allegations. By highlighting the protection afforded to businesses in choosing their dealings, Live Nation seeks to assert that its venue management practices do not violate antitrust laws.
The DOJ’s 128-page complaint alleges that Live Nation conditions artists’ access to the 56 outdoor amphitheaters it controls by requiring them to choose Live Nation as the promoter for concerts at these venues. This practice, according to the DOJ, constitutes an illegal tying arrangement that restricts competition in the concert promotion market.
Judge Subramanian invited Live Nation’s attorneys to file a letter identifying issues with the DOJ complaint during a pre-trial hearing on June 27. Pfeiffer’s letter argues that this early opportunity to contest the DOJ’s claims could provide a strong basis for dismissing the case with prejudice if the government fails to overcome Live Nation’s arguments.
In addition to the DOJ’s allegations, 30 state attorneys general have filed antitrust claims against Live Nation. Pfeiffer’s letter seeks to dismiss these claims as well, describing them as “threadbare and conclusory.” He notes that many state AGs merely reiterate the DOJ’s allegations without specifically detailing the elements of each state-law claim or identifying the conduct that allegedly violates state laws.
Pfeiffer further criticizes the states for not detailing their damage claims and argues that many objections are barred by various states’ statutes of limitations.
The DOJ has until September 18 to respond to Live Nation’s letter.
