Ticketmaster will pay a $10 million fine to resolve federal allegations that former executives and employees illegally accessed competitors’ computer systems to allegedly collect company information.
The fine was paid as part of a postponement agreement with Brooklyn federal prosecutors filed Wednesday with information in a five-count criminal case to charge Ticketmaster with computer burglary and fraud. According to the contract, Ticketmaster is a subsidiary of the concert giant.
Live Nation Entertainment Inc.
-should report to the Brooklyn Public Prosecutor’s Office on the new compliance efforts over the next three years. If the agreement is not respected, the company may be held liable.
Ticketmaster stated in a press release that the two employees responsible for the infringement were dismissed in 2017. We’re glad that this problem has now been solved, he said.
Federal prosecutors said Ticketmaster’s executives and employees used references from another company, the UK-based online ticketing platform, to enable artists to sell tickets before general sales begin – a coordinated effort to strangle the company’s business.
The British company was not mentioned in the court documents, but has been identified as Crowdsurge, a company that merged with Songkick in 2015. In 2018, Live Nation reached a $110 million deal with Songkick’s parent company and agreed to acquire the company to settle a lawsuit alleging that Ticketmaster was using illegally obtained information to compete with Songkick.
Central to the device was a former Crowdsurge employee who moved to Live Nation in 2013 and who, according to the plaintiffs, encouraged his new colleagues to use the username and password to gather information about competitors. The former employee was not indicted or mentioned in the court documents. Another former Ticketmaster director pleaded guilty in 2019 to a conspiracy in connection with an alleged system that would have lasted from about 2013 to 2015.
According to the plaintiffs, Live Nation and Ticketmaster employees illegally followed the designs of the ticketing sites developed by Crowdsurge and created a spreadsheet to track the company’s customers and make offers in an attempt to dissuade the artists from using the competitor’s services.
Live Nation and Ticketmaster are under legal supervision on several fronts. Earlier this year, the New York Attorney General’s office said it would review complaints about the reimbursement of programming delayed due to the coronavirus pandemic. Ticketmaster refused to change its refund rules.
Earlier this year, the company reached an agreement with the U.S. Department of Justice on its ticketing practices following allegations that Live Nation was trying to force concert promoters to use Ticketmaster.
Live Nation said in January that it did not agree with the allegations of the Ministry of Justice and that the company had decided to make it clear that it had no interest in threatening or retaliating against other ticket companies.
-Ann Steele contributed to this article.
Email Rebecca Davis O’Brien at Rebecca.OBrien@wsj.com.
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Published in print on 31 December 2020 under the title Ticketmaster was fined $10 million for espionage.