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Law360 (May 14, 2020, 8:53 PM EDT ) A group of Democratic senators are urging the Justice Department to make sure that Live Nation doesn't seize on the coronavirus pandemic to tighten its hold on the live performance marketplace at the expense of smaller venue operators.
U.S. Sens. Amy Klobuchar, D-Minn., Richard Blumenthal, D-Conn., and Cory Booker, D-N.J., sent a letter Thursday to the head of the U.S. Department of Justice's Antitrust Division noting the devastating impact the COVID-19 outbreak has had on live performance venues.
Social distancing measures made these venues among the first businesses to close because of the coronavirus, and continued danger posed by large gatherings means they will likely be among the last to reopen, the letter said.
"Due to the nature of COVID-19 and how it is transmitted from person to person, the live event industry has been hit as hard as any," the letter said. "This has caused event spaces across the country to close their doors, with little prospect of reopening in the near future and no alternative sources of income."
The senators pointed to the DOJ's decision last year to extend a court order stemming from the review of Live Nation's $2.5 billion merger with Ticketmaster in 2010, a move that combined the concert promoter with a ticket provider. Enforcers accused the company in December of violating the commitments it made for the deal by repeatedly conditioning the "provision of live concerts on a venue's purchase of Ticketmaster ticketing services" and then retaliating against venues that used other providers.
Klobuchar and Blumenthal had called on the DOJ to investigate concerns about Live Nation's conduct in August last year following news reports that the company had been flouting the merger settlement.
Thursday's letter said extending the order shows that the DOJ has been aware since before the pandemic of complaints from industry participants about Live Nation leveraging its dominant position. And the struggles currently facing smaller venue operators may allow the company to emerge from the crisis even more powerful than before, the senators warned.
"Under these unprecedented circumstances, which are threatening the entire industry, the antitrust division must continue to monitor these markets to ensure that Live Nation does not further entrench its market dominance at the expense of smaller rivals," the letter said.
Smaller operators do not have the same resources to weather the crisis that Live Nation does, meaning the financial stress could force many to either close permanently or sell out to large buyers — "if not to Live Nation itself," the letter said. Some of the independent venues have also raised concerns that Live Nation will use its presence in ticketing and artist management to make it harder for them to book events after the crisis.
"We have serious concerns about the state of competition in the live entertainment industry, and the severe financial stress on the industry only exacerbates our concerns," the letter said. "When Americans are ready to go back to stadiums, theaters, and concert halls, they deserve a competitive marketplace that offers value, choice, and a variety of entertainment experiences."
In a statement Thursday, a representative for Live Nation told Law360 that the company, like all members of the entertainment industry, is focused on its employees, customers and partners "during this unprecedented and challenging time."
"We remain committed to being a market leader in an industry we are certain will hit stride again soon, and that includes our unwavering commitment to full compliance with our DOJ consent decree," the statement said.
In early May, Klobuchar, Blumenthal and Booker were among a coalition of 15 senators that sent a letter to the DOJ and the Federal Trade Commission urging them to vigilantly enforce against anti-competitive mergers and conduct as the country continues to suffer the effects of COVID-19.
There have also been calls from representatives for a moratorium on most merger activity during the health crisis.
Representatives for the DOJ did not immediately respond to a request for comment Thursday.
--Additional reporting by Anne Cullen. Editing by Daniel King.
For a reprint of this article, please contact reprints@law360.com.
