>> this hearing of the senate judiciary committee would come to order. i would like to welcome everybody to today's hearing, the first hearing of the 100 and 18th congress. we have the opportunity to share good news about the committee. we reported nearly 40 bipartisan bills, including bills that were already signed into law to protect survivors of sexual assault and harassment, reject the safety of federal judges and their families, and fast and support law enforcement and more. we reestablished the oversight role of the committee over the fbi, doj, and homeland security. we had hearings on topics ranging from prisons to the fbi's mishandling of an investigation to holding war criminals to account. we worked in a successful fashion to fill vacancies on the federal court, justice department and the commission and more. we did all this despite the challenges of an evenly divided committee of seven, and though he is not here at the moment, i want to thank the senator from iowa for his service as the rating committee member. he was a real partner insurance thing -- in ensuring the business was done. i would like to welcome the new ranking member, senator lindsey graham. he and i have worked together on many issues and many years. i look forward to working with him again, and with all of the members of the committee over the next two years. i would like to turn to the subject of today's hearing, which focus on ticketing and the live entertainment industry. this garnered a lot of attention towards the end of 2022, of -- especially in november when ticketmaster failed to maintain services for taylor swift's new tour, leaving fans stuck virtual kids for hours. while live nation and ticketmaster have offered destinations for these issues, these issues are symptomatic, i think, of a larger problem. ticketing markets like competition and are dominated by a single entity, live nation. live nation merged with ticketmaster in a deal that joint the largest ticketing company with the largest event promoter. attorneys general for many states suited to block the merger, but it was ultimately -- ultimately allowed to go through. with that the set of conditions and domestic chores attended to assure competition. unfortunately, that does not appear to have been effective. in a decade plus since the merger, live nation has consolidated its dominant position in the ticketing and live entertainment markets. that result is a ticket and competition killing strategy. i would also like to thank senator klobuchar, who has made competition policy the forefront of our conversation. and also thank ranking member centered -- senator klobuchar as for meeting and assembled an expert panel of witnesses who will discuss have ticketing and live entertainment markets became so concentrated to the detriment of consumers. and the impact of that concentration, and the tenant -- steps we need to take to bring concentration back. i will turn this over to senator graham for opening remarks, then senators graham and lee will speak, and then i will swear and the witnesses, and then i will have the gavel to senator klobuchar. >> we are in a new congress and have a chance to move forward in a productive fashion. i think this hearing represents the best of the committee. i will thanks senator lee and senator klobuchar for coming together over a matter that matters to a lot of americans, i think the big thing here today is consolidation of power in the hands of the few that can create problems for the many. competition is a good thing. and we will determine today what happened, how did the system failed so spectacularly, what can we do in the future. and i think this hearing represents the better nature of the judiciary community -- committee, which we have a reputation of fighting among ourselves, but that is ok because we have a rotation for solving problems. i know i chairman well, i admire senator durbin, he is a man who can fight but can also find consensus. and social media seems to be one of the areas that the congress and the public is desirous of us doing something. his companies are the most powerful on the planet. they had unlimited money. they cannot be sued, there is no regulatory environment. so if you are looking for something to do with us mr. chairman, to limit the problem of social media would be something that the committee should focus on. i look forward to working with you in this hearing today, and it is a sign that we are in business early on. i hope we can make a better experience for the consumer being able to top -- buy tickets to things that you want to see without a debacle. so thank you very much. >> thank you senator graham, senator klobuchar. >> thank you very much chair durbin and senator graham for working with senator lee and myself. this is clearly a bipartisan indefinite -- endeavor, we have interest from both sides of the out, and i think as senator durbin mentioned, i believe in capitalism and to have a strong capitalist system you have to have competition. it cannot have too much consolidation, something that i think unfortunately for this country, as in 02 taylor swift i would say, we know all to well. in over 75% of our industries, ranging from agriculture to pharmaceuticals, to life events, a smaller number of large companies that control more of the business that they did 20 years ago. at the end of last year, i worked with members of this committee and are bipartisan partners, such as senator grassley, to update our merger fee statute that had not been updated for decades. it is going to bring in $100 million a year for our enforcement agencies from the justice department to the ftc. it is really important. we also have the key bill that senator lee has been advocating for a venue with the tech companies, and allowing us to keep state -- cases in the states where they bring them. i think you're going to see more cases and investigations coming out of the doj, and i think that will be very important. but why am i here today, and have taken this on? i love music, so i grew up in the suburbs and high school, i remember loading into a van and with my friends going julie led zeppelin and aerosmith and the cars. now, i don't think it is very easy to make their money on the weekend and buy tickets to these major concerts. my state has made more than its share contributions to music from prince to bob dylan to lizzo, and on 1st avenue, the iconic event space where prince got his start, and was made famous in the movie purple rain, is a point of pride for the people in our state, and one of the reasons we work so hard to pass are saved stages bill, the biggest investment in the arts in the history of america. so whether it is fans, performers or venue operators, we need to make sure we have competition to bring prices down and bring innovation in and stop the fiasco. today, live nation does not just dominate the ticketing. it is about 70% of the big concert market. but also, they owned many of the major venues. and for the videos that they don't own, they tend to lock-in on 3-5-70 year agreements. that means the competitors out there are unable to compete when it comes to ticketing. they finally dominate promoting. we have talked to many venues, some of which are willing to come forward, unlike one of them that is here today, even if there are not out there threatening them, they are afraid to go to someone else because they are not going to get the acts that they want. this is all a definition of monopoly, because live nation is so powerful that it does not need to exert pressure, it doesn't need to do anything, people just fall in line. ticketmaster has gotten into the ticket resale game, where they can charge additional fees of the resale of the same ticket after charging an initial fee. the live event experience becomes increasingly out of reach for so many fans. one study found that 27% of the ticket price was the fees. some tickets were as high as 75% of face value. and we also know it affects service. as millions of taylor swift fans found out last fall, there are few consequences for failing to deliver the service. for taylor swift, i think it is are important -- import of r. kelly's to note, whether it is bts or bad bunny, or bruce springsteen, pearl jam, the pixies, fans artists and venues are facing real issues with live nation. i am hopeful this can be a constructive hearing. so the public can find out what is happening in, --, so that they can know something might change. and the third reason is that our colleagues on a bipartisan basis can work together on legislation, and blumenthal has been involved in this issue for many years, and we can do something, not just to strengthen antitrust laws generally, but also specifically in the ticketing industry when it comes to transparency and resale, and the like. restoring competition to our markets is about making sure that fans get fair prices and better service. concertgoers today should be able to have that same experience that i had and i was in high school, when it did not cost very much to be able to go see a band and remember it forever. thank you. >> thank you senator klobuchar. senator lee of utah. >> thank you mr. chairman, and thank you chairwoman klobuchar. we are looking forward to my going -- ongoing service on the antitrust committee. along with senator klobuchar as chair, to be honest i had hoped a few months ago to get the gavel back, but once again, she is cheer captain and i am on the bleachers. >> your little bit -- you're more than that. >> all joking aside, this hearing for me is not only about the latest ticketing disaster, that has made headlines. there are much bigger issues involved then this one event. although that one event is not to be discounted in itself, it is significant. ticketing market in the united states is a complex industry. involving artists, agents, promoters, venues, primary and secondary ticketing companies, and fans. many of whom we see outside of our buildings today driving up this morning. i could not help but notice i had never seen more smiling and happy demonstrators that i saw today. i think these fans have figured something out that they are fair get a getting their message across. their message has come across in many forms over the last couple of months, including a letter i received from a young woman named aaron harding in utah, only 16 years old. she sent me a letter and an accompanying powerpoint presentation, and i think she has a bright future ahead of her as an antitrust lawyer or perhaps in a number of other fields. it's an impressive response. we have got to remember that for those who fit -- follow antitrust policy, the ticket space in the last few years have offered a natural experiment for evaluating efficiency claims of merging parties, and antitrust laws. back into this intent, the obama justice department antitrust division concluded an investigation into the then proposed merger of ticketmaster, the nation's largest and dominant ticketing provider, and live nation, the country's largest concert promoter. in a complaint alleging that the merger violated the clayton act, the department argued that it would eliminate recent, but quickly going head-to-head competition. however, instead of just stopping the merger, the obama justice department in 2010 said that the department would approve it if and only if the parties agreed to a proposed consent decree. the consent decree that was entered into by ticketmaster and live nation addressed to concerns. first, that the combination of the companies would allow the merge to tide the provision of ticketing services and concert promotion. in other words, that live nation could force venues to use ticketmaster in order to get concerts and vice versa. at second, that it might retaliate against venues that did not comply with this arrangement. ticketmaster multi-that the settlement was something that they were willing to enter into. they were not bothered by the dissent -- consent decree at all, because according to them it was the functional equivalent of they are offering the sleeves off of their best. -- fast. and ticketmaster and live nation agreed not to believe -- engage in behavior, and they had no intention of undertaking these behaviors. here we are 13 years later faced with a flotilla of allegations and complaints that the merged entity has done exactly what it said would never happen. there are news reports that the just -- justice department has opened a new investigation into ticketmaster's conduct. but congress has an important role to play here as well. while the doj wants to know whether ticketmaster is violating the consent decree, congress should be asking whether that -- consent degree was the for -- right decision. first to assure competitive pressure on the competitive entity of ticketmaster and live nation, or the behavioral remedies capable of presenting that kind of behavior. if we can prove that they raise doubts about the sufficiency of the doj's efforts and cancel in favor of a new approach going forward. with all that in mind, today is a perfect opportunity to do with this committee is supposed to do. exercise oversight over the executive branches law enforcement efforts, and to consider in what ways new legislation or better enforcement of existing laws might be needed to protect the american people. i'm glad that we are here today, and i look forward to hearing from each of our witnesses. thank you. >> thank you senator lee. thank -- let me enter -- welcome the six witnesses. we have the president and cfo of live nation. prior to joining live nation, mr. burke was president of technicolor creative services antenna color, leading the west coast media practice. jack grossinger, president of a mobile ticketing platform. he -- it launched as an aggregator of ticket resellers, and now serves as a secondary market place for sports teams. mr. grossinger was an associate counsel within the company. jerry michelson is the cofounder of jam productions of chicago. the chicago-based concert production agency and one of the largest producers of live entertainment in the country. this is a return trip from mr. michelson. he has appeared before the antitrust committee in 2009 on a hearing of the impending merger of ticketmaster and live nation. he warned us of any competitive effects of the merger that could exist, saying that this is vertical integration on steroids. i look forward to hearing an update on this. senior vice president of the james madison institute, a tallahassee based think tank focusing on economics in florida. he sees overseas coalition building, strategy development and has writings published in newsweek, the wall street journal, and the hill. he serves as the antitrust introduced vice president for legal advocacy. and is an attorney in the apartment of justice, and represented the antitrust department indymac -- u.s.-mexico, canada agreement and the trans atlantic trade partnership. life lawrence is the leader of lords and the musicians, a composer, and it musician. he wrote an op-ed about the live nation debacle. he explained how live nation's market dominance negative impact -- negatively impacted artists like himself, and i look forward to hearing his perspective. after swearing at the witnesses, each will have five minutes make an opening statement and then turned to senator's questions. as i mentioned, i will pass the gavel to senator klobuchar to persona and over the hearing. please stand to be sworn in. >> do you affirm the testimony you are about to give in front of the committee, will be the truth, nothing but the truth and the whole truth so help you god? all witnesses answered in the affirmative, and mr. burke told me in his opening statement there would be a ceremonial handing link at the gavel. >> senators and other members of the committee, i am the cfo of live nation entertainment. i think you for the invitation to appear today to address these important issues in the live entertainment industry so we can together work to make things better. for almost 20 years, live nation has operated in the united states and around the world with that artist first business model that is focused on putting artists on stage and connecting them with their fans. we believe that the artist fan connection is the foundation of the light entertainment industry, the source of nearly all commercial value, and the number one thing that public policy should protect. over this. we have helped the industry grow rapidly. in 2022, live music was a $12 billion industry, four times what was in 2000 and five. to feel this growth, live nation has invested billions of dollars funding artists globally, $9 billion in 2022 alone. giving our investment in artists, it is critical that we have the most effective platform possible for selling tickets. since our merger with ticketmaster we have invested over $1 billion in capital to improve the ticketmaster system. much of this was on technology to illuminate fraud and get tickets to fan and set -- fans instead of scalpers using bots. a prime example of which is are fan service. we are best in class in conducting marketing for concerts, preventing frauds, and getting tickets into the hands of real fans. i do want to take a moment to address confusion about what ticketmaster and other primary ticketing platforms do and do not do. primary ticketing companies, including ticketmaster, do not sit ticket prices. we do not decide how many tickets go on sale, and when. and we do not sit services. pricing and distribution centers are determined by the artists and their teams. service fees, even if they are called ticketing fees, are retained by the venues. and there portion of the service fee that ticketmaster retains has been falling steadily over time. this leads to the topic of today's hearing, competition and ticketing markets. we hear people say that tv -- ticketing markets are less competitive today than they were previously. that is something not true. the department of justice alleged that ticketmaster's market share was over 80%. it is a different story today. the most obvious change is the emergence of the secondary ticket market. but also in primary ticketing, ticketmaster and 2010 did not taste the level of competition that we face today with highly capitalized competitors, including several competitors including tickets.com and pack human. ticketmaster has lost, not gained since the merge, and today's competitive bidding process with radical alternative ticketing companies resulting in getting less of the economic value in the contract every year. there are problems in the ticketing industry, problems that can and should be addressed for legislation, many are the direct result of an industrial scale ticket scalping that goes on today. a $5 billion industry of concerts alone in the united states field by practices that run counter to the interests of artists and their fans. the recent sales experience with taylor swift has highlighted the need to address these issues perfectly. we knew boxwood attack that on sale. we were then hit with three times the amount about traffic waiver experience, and they came for a password service as well. and the bots failed to penetrate our systems, but they slowed down or paused our sales. this is what led to a terrible consumer experience. which we deeply regret. we apologize to the fans, we apologize to mr. swift, -- misses swift, and we need to do better. ticketmaster learned valuable things from this. let me be clear that ticketmaster accepts responsibility as the first line of defense against the bots in our industry. it's in ever escalating arms race. we are here to discuss public policy, but we also need to recognize how industrial scalpers using bots and cyberattack to unfairly gain tickets contributes to this awful experience. there are many things that we can and should accomplish together, we should enlarge the scope of antibiotic enforcement. we should enact categorical prohibitions on scabbing practices, such as offering tickets before they are on sale on the primary. we should demand all in pricing so that fans see the full price for the start. we share the goal of making the live industry better for artists, fans, and companies alike. that is why i said before you today, to make the expense better. i look forward to answering your questions. >> good morning. members of the committee, my name is jack pressing her -- great singer. and like so many millions i am a fan, who grew up in cleveland ohio, and some my childhood memories are going to see concerts with my dad and seeing games with friends. myco finder -- founders and i started seeking because we believe in the power of life events to create -- create incredible moments. and yet we believe that they experience online is pretty much the opposite. antiquated. i have spent the last 13 plus years working in this industry, and there are three things that are clear to me and clear to many others who work and live entertainment. number one, and lack of robust competition in our industry we initially stumped innovation, and fans suffer. and losing out on life nation ticket methods -- concerts if they don't use ticketmaster. the only way to restore calm addition is to break up ticketmaster. i started my company in 2000 and nine, as was mentioned we were research engine that allowed users to search across a lot of things. we grew over time and in 2016 we entered the primary ticketing market. throughout our evolution, we have maintained intense focus on consumers. we have watched many industry first features that make it easier and more affordable to go to events. i am very proud of all the work that we have done. but i also recognize the ongoing challenges that face our industry, some of which have recently been from live nation. the best way to address those challenges is to ensure there is robust competition for businesses and consumers are -- consumers who select products and services based on the merits. that has not happened yet. does that happen because live nation controls the world, most of the large doors, and operates many of the systems while owning the venues. this power over the life industry allows ticketmaster to retain its influence. as long as it remains both the dominant concert promoter and ticket are at major venues in the united states, we will lock competition and continue to struggle. live nation entertainment is the product of the 2010 merger of ticketmaster and live nation. as is also mentioned, they entered into a consent decree which bans ticketmaster from threatening or retaliating against venues by withholding live nation tickets. that is not worked at all. the 2000 nine investigation confirms that ticketmaster had violated that repeatedly almost without exception. this -- there are numerous examples of threats and retaliation against venues that did not contract with ticketmaster. today, ticketmaster's market share is over 70% of the united states primary ticketing market. ticketmaster is the primary provider for the any -- nba nhl, and nfl teams. it is the largest nature of promoter of concerts in the world, holding the top 25% of tours in 2021. it is no mystery why no other company has penetrated the ticketing market. major venues know that if they move there ticketing business from ticketmaster they risk losing revenue they earn from live nation concerts. they mend this because live nation has told them so, directly and indirectly, or public announcements, private communication, and so the -- subsequent retaliation. the doj found as a consequence of live nation's conduct, quote, venues throughout the united states have come to expect that refusing to contract with ticketmaster means fewer live nation concerts or not at all. -- none at all. our industry provides a cautionary tale about how behavioral remedies cannot solve the problems inherent in an anticompetitive merger. the only remedy now is a structural one. the dissolution of the common ownership of ticketmaster and live nation. to improve our industry we must whisper competition. we deeply care about the live event industry and believe it is time for artists and venues alive to get the choice to deserve, it is a privilege to be here, thank you for your time and attention. >> thank you very much mr. groetzinger, and next up we have with us mr. michelson, thank you. and thank you for the work you do with the palace in st. paul minnesota. >> thank you senator. taking chairman derman, recommend or graham, and senator lee and senator klobuchar, along with members of the committee for allowing me to appear before you today. i'm here to speak on behalf of my colleagues, fellow promoters, and most importantly, concert fence. my presence before you is based on my 50 years of experience in the live entertainment industry. my name is jerry michelson, president of jam productions, a company that has produced events since 1972. as a primer for those who may not know, let me briefly talk about the job of promoters. we work with agents and managers to route 2 markets across the country. we make guaranteed payments to artists, contracted venues, market show to put tickets on sale, and produce the show. we pay all the costs and assume all risks. if live nation loses money, they can become comfort with operating income from ticketing and sponsorships. we cannot do that. we do not have those. our competitor letters -- earns money from serving tickets to our competitors. i appeared before the committee over the initial merger. i stated that the unification of these two goliaths would create a business with extraordinary market power and clout unlike any that i have ever seen in my lifetime. i testified if this merger was allowed to proceed, the combined entity would have the smith -- the ability to suppress competition and many segments of the industry. today, we know with certainty that this merger is vertical integration on steroids, using dominance in one market to expand its power and dominance it into another. putting out competition and harming consumers. from my vantage point, the arena level concerts used to be jan's most profitable segment of the business. because that is where we earned our money. in 1996, jan produced 100 concerts and arena. -- arenas. 2011 -- in 2011 that decreased to 46, and in 2022 only produced 14 arena concerts. live nation went after the arena business and succeeded in driving us and other independent promoters out of that sector. live nation effectively eliminate a competition for indoor arena shows by utilizing the following methods. purchasing national indoor tours and arenas and outdoor theater's. threatening financial penalties on a tour dear deal if the artist wanted to work for jan. threatening to ban 100% or more of the gross ticket sales, and live nation managed artists typically only performed for live nation promoted shows at the arena level. now, live nation is going after music theaters and clubs of all sizes in order to control the live music industry from the top to the bottom. from 2010 to 2021, live nation added 61 theaters and 41 clubs to their already large arsenal of venues. the near complete of arenas because of the merger will soon happen in theaters and clubs in every community in the country. and 2016 libations -- live nation earnings call said that one of the biggest goals was to convince artists to integrate primary date -- primary and secular taken markets to grow live nation's share. i quote, artists get more comfortable seeing these things together, our market share grows. they are not serving artists, they are serving themselves. there are antitrust decisions that i would like to bring to your attention. the 1948 supreme court decision in the u.s. versus paramount ledge to the abolishment of block booking -- like looking and forced theaters to sell them chains. the court has held many times that power against -- times that power came through advantage can give rise to liability if a seller exploits his dominant position in the market to expand his empire into the next. every time that my nature -- live nation ticketmaster blame anyone else for the significant issues and increasingly high fees, remember the many times they are the venue, the promoter, and the manager. of that artist. by controlling ticketing and promotion, they are choking out competition that is often targeted into the broken system we see today. this is most acutely seen in taylor swift and happens every day, generating outrage and despair. they for your time and i look for to answer your questions. >> thank you very much. >> madame chairwoman, neighbors of the committee, i would like to thank you for the opportunity to appear before you. i serve on the policy team at the james madison institute in tallahassee, florida. we are nonprofit think tank that focuses on the policy issues impacting florida's 22 million residents. fresh out of college and starting a career policy, i jumped of one day testified before the united states senate's -- senate on an issue of profound importance, either international monetary policy or perhaps a supreme court nomination. but in -- but as my daughters informed me last night, dad, nothing you speak on in your career will be as important as what you say today. don't mess this up. so, here we go. florida is home to 15 major sports team, 15 major league baseball training facilities, nascar, college and numerous other sports venues. i say that because most of those videos serve as concert sites when they are not in use during their respective seasons. in florida, sports and live entertainment is a six and a half billion dollar market, a sizable share of the 33 billion dollar economic impact of the nation. this is important to flirty ends, not just with respect flight -- primary ticketing, the secondary ticket market which i would like to open with. i would like to offer our perspective by way of a brief analogy. because i am an employee of a nonprofit organization, i drive a 50-year-old car with 2500 miles on it -- 200 50,000 miles on it. i purchased it from a private dealer, and to make its dismay it is still going on. volvo didn't place any restrictions on it, and when i resell it, they will have no role in the transaction. i don't think they have a clue what happened to the car since it left the dealership. this is true for just about every auto manufacture. consequently, our auto market is a robust, front and diverse industry largely -- thriving and diverse industry largely driven by supply and demand. the same could be the case before the reselling of tickets to sports events and concerts. it could be, but it is not. there is one dominant market player approaching 80% of the primary market. this sows allow them the ability to leverage that dominance through service fees, exclusivity requirements and other practices that are ultimately borne by consumers. a debate is occurring helpful what a person actually obtains when they it purchase a ticket. someone argued that the purchaser is simply leasing or renting a space in a venue, and the lease is subject to terms and conditions. in our opinion, that logic rests on misguided assumption that the commodity is the venue. has anyone attending a jaguars game, or a harry styles concert for that matter they are going, and they will reply i am going to the jaguars game, or i am taking my daughters to see harry styles. they would not apply with i am going to tiaa bank field this afternoon, or taking my kids to ny arena. the state -- the stadia may have a life of 15 years, but the commodity is an event with a few hours of longevity. this is wedded to the debate over the issues within the event ticketing space. over the last several years we have heard the term consumer welfare standard audit more frequently. questions over whether the standard is still applicable in today's vichy economy, whether it should be replaced with some other subjects rather, -- measure, and what it even means. i am going to ask you all today as we conduct this hearing to set that principle aside, in this area we would contend that consumer welfare is very clearly defined and reflective of the issues and challenges within this industry. those representing the dominant player would contend that their group has allowed them to innovate and make advances that greatly benefit consumers. a few million taylor swift fans would respond this is why we can't have nice things. to be clear, from our perspective, the issue is not that taylor swift crash. that merely revealed how a lack of competition over time has corroded innovation and distorted the market. i would ask, suppose a robust, vibrant and competitive market had been allowed to evolve and innovate over the last 20 years. with the taylor dashboard this crash have occurred? it is a hypothetical, but absolutely one worth considering. i conclude my remarks with a call to u.s. policy makers. in this topic, in this arena, consumer welfare is very clear to define and there are times to compete -- consumers from anticompetitive packet -- practices. i appreciate the opportunity to be before you today. >> thank you very much, and next up, ms. british. -- bray -- >> thank you. it is an honor to be there to -- here today to add our perspective to the issue of live entertainment. i applaud senate lawmakers for turning their eyes to a serious issue that hurts concertgoers, artists and smaller competitors across the life team industry. there are a few major points and policy recommendations i would like to highlight. first, ticketmaster is an example on one hand of a traditional monopoly in the mode of standard oil, and it 21st digital -- try for century digital player dominating an ever widening swath of its industry. it creates the incentive and the ability for the gym petition to protect itself. in digital ticketing, this includes excluding ticket resellers, and brokers who provide important competition by the secondary ticketing market. customers pay the price for these monopolistic acts with higher ticket prices and lower quality, less choice, and less innovation. artists who like the blockbuster power a base -- swift or springsteen lose that. the supply also loses out. we should learn from the failure of the verities that where a condition of the doj's clearance of the 2010 merger of live nation and ticketmaster. a lengthy investigation concluded in 2020 that live nation ticketmaster repeatedly planted to the requirements of the consent decree. unfortunately, rather than seeking an effective structural remedy, the doj's amended some of the language in that consent decree, and extended it for another five and a half years. the amended decree did nothing to change the anticompetitive incentives. this current doj has recognized the ineffectiveness of behavioral remedies that run counter to a company's incentive. the doj should pursue new enforcement action to obtain effective its -- structural relief. dish should be three consummated structural challenge, or monopolization case under the sherman act. this would eliminate the incentive to stifle competition, and produce -- reducing to -- ticketmaster's market share would reduce their incentive. producing -- from take measures harmful conduct will requirements will policy tools including antitrust enforcement, against live nation ticketmaster, and legislative action. i urge enforcement and lawmakers to consider three major features of a multipronged approach to the live nation ticketmaster monopoly problem. first, consider standards that enabled the agency to challenge for -- vertical mergers as effectively as horizontal ones. the clayton act is designed to prevent all mergers that they enhance market power and lead to end the competitive effects. we have a structural presumption for market mergers. we need a presumption for vertical mergers, either through legislative action, or antitrust guidelines adopted. by the second -- second, legislation designed to strengthen and clarify antitrust laws. senator klobuchar has provided her antitrust reform act for example. it would update legal standards for such reforms would reduce the process on th government to bringing merger cases. dominant digital platforms can engage in practices designed to sell preference such as steering music fans to ticketmaster's proprietary services. this may require establishing both codes of contact for digital ticketing ply spurred such legislation has been proposed at the state and federal level. thank you for the opportunity to testify today and i look forward to your questions. >> thank you very much, and last but not least, is lawrence o f the band lawrence. looking at your testimony ahead of time, mr. lawrence, i at -- i enjoy the line that perhaps you repeat that while you were so proud of your band we're not artists on the level of ask like taylor swift or bruce springsteen. we do hope one day to be big enough to crash a ticketing website. with that, i turn it over to you, mr. lawrence. mr. lawrence: i do not think it will get his big a laugh when i say it. thank you for inviting us today to the most unique gig we have had in years. my name is clive lawrence and this is jordan cohen we are two of the members of lawrence from new york city. before tell you more about who we are, it is important to clarify who we are not. we are not lawyers or economist with expertise in antitrust policies and as the senator said, we are not artists on the levels of taylor swift or bruce springsteen. we are season artists who have toured extensively over the last seven years starting with empty bar and working up to headlining sold-out out shows for thousands and seeing our user chart on top 40 radio. we became musicians because of our passion for making music. we realized early on we needed to embrace the entrepreneurial aspects of pursuing careers. ever since we started touring we have tried to be vocal. even including the lyric live nation is a monopoly in our latest album. whether or not it meets the legal definition of a monopoly is someone else's call to make. we are here to tell you what we observe. while we will discuss those in our written testimony, most of the issues we face stem from the fact that live nation/ticketmaster often acts as three things, the promoter, the venue and the ticketing come pay. let's imagine we played a show at a venue live nation owns and operates. when an artist plays these venues, they are required to use live nation as a promoter. more than advertising the promoter coordinates and pays the upfront cost to put together a concert such as staffing a venue and striking a deal with the performer. since both our pay and theirs is a share of the show's profits we should be partners aligned in our centers, keep costs low while ensuring the best fan experience. but with live nation not only acting as the promoter were also as the owner and/or operator of the venue, it complicates these incentives. at the end of the show, costs will have eaten into most of the money may that evening and due to live nation's control across the industry, we are -- have practically no leverage and negotiated. if they want to take 10% of the revenue and call it a fee, they can and have. if they want to charge $30,000 for the house nut, they can and have. if they want to charge us $250 for a stack of 10 clean towels, they can then happy you once these costs, which went to live nation's sin city aris, are taken into account, the remainder split between live nation and the band. in a world with the promoter and the venue or are not affiliated with each other, we can trust up or the promoter will look to get the best deals on the venue. however in this case, the promoter and the venue are part of the same corporate entity. these line items are essentially live nation negotiating to pay itself. does that seem fair? the tickets were listed at $30. our pay ended up shaking out to about $12 of each ticket but in this show the fan did not pay $30 for that ticket. the fan paid $42 because ticketmaster tacked on a fee. for the record we have had them go as 82%. as with promotions, if an artist plays at live nation then you the artist has no choice but to have the show ticketed by ticketmaster. to be clear, we have absolutely zero say or visibility in how much these fees will be. we find out the same way as everyone else by logging on to ticketmaster once the show already goes on sale. in case you're wondering, no we the artist do not get a cent of that fee. of the $42 offense spends on the ticket, we received $12. but where's live nation's costs were covered at this point in the calculation we still need to pay for our touring costs. and in our case roughly 50% of our earnings is used to cover expenses. that leaves us with $6.00 pretax, and we also have to pay our own health insurance. to be fair, many of the issue we have addressed are not exclusive to live nation/ticketmaster, and we got a number of positive experiences with parts of live nation. their venues are often filled with hard-working and passionate people. and most importantly, we love that all of their venues have one consistent wi-fi network and password, that is a game changer. jokes aside, we truly do not see live nation as the enemy. they are just the largest player in a game that feels stacked against us as artists and our fans as well. ultimately when looking at the current state of the industry we are left with lots of questions. why is that all of live nation's costs get recouped before the show his the profit point yet hours don't. why is there so little transparency as to what facility fees actually go towards? why is it standard for live nation to take a 20% commission on our merchandise sales while we never received a cent of their ancillary revenues like concessions and alcohol and parking? finally, why is live nation allowed to set exuberantly high ticket fees without any transparency or input while in other industries the government has mandated caps. we look for to seeing these questions get some answers. thank you for your time and we hope to see some of you in one of our concerts. if you would like to come, let me know and i would throw you on the guest list. to help you avoid the ticket fees. >> thank you very much, mr. lawrence. i think we are willing to pay but we appreciate your testimony. ok. with that, i am going to turn it over for the first round of questioning to our chair, senator durbin. >> mr. lawrence, i will stick with you for a minute because you made it clear that you do not set the ticket price and mr. burkhold said he does not have anything to do with the ticket price. who does set to -- set the ticket price? >> that is the question i was most surprised to hear, because we have no say in if we actually ask the venues in advance they say that is a ticketmaster thing. the fees, i mean. we do set the base place, the artist does have a say, but those added ticketmaster fees we have no say in the venues claim that they are ticketmaster. >> do you want to add anything to that? mr. berchtold: thank you, yes, as mr. lawrence said, the band sets the ticket price. the service fee level is set by the venue. sen. durbin: you control the venue? do you not? mr. berchtold: of approximately 4000 venues in united states, live nation operates approximately 200. roughly 5% of the venues. sen. durbin: are they the biggest? mr. berchtold: no, sir. they are generally, the biggest tend to be the sports venues, the owners of the sports teams. sen. durbin: you had an experience at barclays, did you not in terms of an opportunity for your company to take over a venue that had been controlled by ticketmaster. how did that work? >> the new york times reported a few weeks ago how once we took over ticketing for the berkeley center in brooklyn the berkeley center saw a market decrease in the number of concerts from live nation sent to that venue versus historical averages. so, earlier, last year, the barclays center management came to us and said we would like to keep using you for ticketing our basketball but we want to be able to use ticketmaster to ticket concerts. we look into it and could not get the economics to work, so we said to them, listen, let's part ways amicably and we did. sen. durbin: so, they used their power of the marketplace to diminish the number of acts? at that venue and the venue decided they had to go back to ticketmaster. mr. groetzinger: the venue decided to move away. sen. durbin: is that true? mr. berchtold: i believe what the new york times was another -- indicated was that another venue opened in the marketplace. yet two venues vying for the show's going to madison square garden and the number of shows from barclays from the promoters went down as a result of the competition. i have not heard of any allegations that we changed our booking of concerts for that venue. i understand every decision about every show, where it was placed, and why. we have determining there was no retaliation. sen. durbin: your last word on barclays? mr. groetzinger: i don't have more to add on retaliation. the doj report found numerous instances of live nation threatening and retaliating against venues once they had moved away from ticketmaster. in one case, the live nation president told the venue they would "go nuclear" if they left. the threat has been documented. sen. durbin: mr. berchtold defended his position saying it was a battle of the bots. have you run into the phenomenon? mr. groetzinger: ticketing -- mr. mickelson: ticketing companies are supposed to have solutions to bots. for the leading ticket company not to be able to handle bots for me is a pretty unbelievable statement. you cannot blame bots for what happened at taylor swift. there is more that story. -- there is more to that story. sen. durbin: you probably heard three things he thinks needs to be done which included pricing on the tickets, find deceptive -- fighting deceptive url's, and creating a civil action. any reaction from you? >> none of those go to the core of what we have been talking about which is the antitrust problem. the fact that live nation and ticketmaster because of its power has the incentive to do things, to exclude competition in all of its markets. i appreciated the suggestions, many of them may be good ideas, but it does not change the fact that live nation and ticketmaster is monopoly and will act to exclude competition. sen. durbin:, madam chair. -- thank you, madam chair. >> next up, senator lee. sen. leahy: -- alleged among other things that ticketmaster had an into percent market share with no competitor having more than 4% of the market. it also alleged live nation for its part was ticketmaster's biggest customer and deleting -- the leading concert promoter. it also alleged live nation have begun competing with ticketmaster for ticketing services. over a short period of time, rising to 16% of the market share in just two months, a meteor cries. -- a meteoric rise. with that in mind, why did the department of justice settle what seems to be a strong case that involves the elimination of head-to-head competition? would you agree what we have here is not a shortcoming of our antitrust laws that gross -- but error, gross negligence in enforcing them? [video clip] there are those -- bradish: there are two elements. a case in court involves risk and the fact is that to pursue a vertical merger in court is difficult, it is very difficult. for doj to win -- sen. lee: post dr. miles. bradish: yeah. that will make them hesitant to do that. the second issue that comes up here is the need for witnesses in a court case. in a situation where there is pervasive fear of the dominant firm where venues and promoters and other independent rivals will potentially suffer consequences, history has suggested that is the case, they would have to testify in court. to get someone to take that risk is not an easy ask. sen. lee: the report by dr. miles is interesting. they pitched this as a horizontal merger, didn't they? did the plane hit identify it as a horizontal and not a vertical? ms. bradish:. is a horizontal and vertical side. sen. lee: there also edition on tidying the cost of -- prohibition on tying the cost of ticket purchases and concert promotion. do you want to say anything about how those have worked in practice? ms. bradish:, it culminated in the 2020 month occasions showed that was repeatedly dilated deck -- repeatedly violated. 22 an environment of fear of retaliation -- it pointed to an environment of fear of retaliation. sen. lee: do you want to respond? mr. berchtold: acknowledge -- i acknowledge that the department of justice alleged six issues in 2019 which led to our decision to -- it is not our business practice. it goes against our focus on alignment with the artist, the idea that we would put our interests ahead of theirs. we are comfortable extending the consent decree. as she mentioned, there were several things that changed. one of the things we have done is in instances where venues are seeking to try ticketing and a -- to tie ticketing and a concert agreement into any overall deal, we have eliminated those. there cannot be any instance of threat of retaliation. we eliminated that along with the establishment of monitors to make sure any venue employee could report any issues. sen. lee: is it accurate to say that at a minimum live nation was a motivated and capable competitor? at the time of the merger? is it accurate to say that at the time of the merger live nation was an emerging and eventually capable competitor? mr. berchtold: live nation was finding it was difficult to build its own ticketing system. one of the driving motivations to the merger was the feeling it wasn't going to successfully build its own system and it sought to find one that could more effectively service its needs. -- serve its needs. sen. lee: i am out of time they -- but they have sold six man -- million tickets and they didn't rise to a prominent position in the marketplace in two months. that is not nothing. thank you. sen. klobuchar: ms. bradish, do you agree the ticketing market was more competitive when ticketmaster was competing with live nation as separate companies? ms. bradish: certainly. especially where you have a new entrant showing the ability to increase its market share rapidly and with great success. that is precisely the kind of pressure you would want to have on a dominant player, to make sure they act in an competitive effect. the loss of that is a loss of competition. sen. klobuchar: we have heard serious concerns from artists, promoters, and venues about live nation's dominance, that it can pressure venues to use ticketmaster's ticketing service exclusively. how else would you explain the fact that ticketmaster has 80% of major venues' contracts in the u.s.? mr. berchtold: it is our policy to not retaliate against venues by using content as part of the ticketing as part of the discussion. sen. klobuchar: have you seen live nation leveraging its power to pressure venues to use ticketmaster from primary ticketing? how are they able to do that? >> when speaking to people that own or manage a venues, their biggest fear is that when they leave ticketmaster, they will lose content. whether it is sad or not, it is -- it is said or not, it is implied that if i don't use ticketmaster i am not going to get all of the shows i would like to have. if you look at the difference between the target center in minneapolis and the xcel energy center in st. paul, the target center is ticketed by access, the xcel energy center is ticketed by ticketmaster. look at the number of shows that play xcel energy center and you will see they far exceeded the number of shows that play target. when you break it down farther, you will see most of the shows that play xcel energy center are live nation shows and they bring few to the target center. sen. klobuchar: thank you for that local reference. one way live nation eliminates competitive pressure is by locking venues into multiyear contracts, three years or five years or seven years. if you tied up 80% of major concert venues with multiyear contracts, where is there room for one of your competitors to get in the door? mr. berchtold: the 80% reference is from a 2008 department of justice study. we believe our market share is substantially lower than that. sen. klobuchar: how much lower? mr. berchtold: there are a variety of ways of estimating the market share. we believe our market share would be somewhere between 50% and 60%. >> keep going. sen. durbin: mr. berchtold: i will acknowledge that it is the standard practice of venues in the u.s. who owned ticketing rights to maximize the value of ticketing rights by having long-term agreements with primary ticketing companies. those contracts tend to last three to five years. i would note an indication of the high level of competitiveness is with almost contract renewal we have, more of the money gets accrued to the venues as opposed to the ticketing provider which would be one indicator of a competitive marketplace. secondly, i would note the success seat geek had between 2018 and 2022 adding up to 50% of the nba and nfl teams' ticketing. sen. klobuchar: do these types of contracts shut out competitors? if you cannot go to anyone else, what are you going to do? ms. bradish: exactly. it is a standard that the longer the contract, the greater the risk of a competitive effect. the fact that they are able to get this length of contract indicates something about their market power. it makes it harder for a new entrant to get into the market. sen. klobuchar: mr. groetzinger, do you think live nation's concert promotion business, the fact that they are combined, has been difficult for you to compete with ticketmaster? mr. groetzinger: absolutely it has. we will go to a client, show them our technology, they will get excited about how it will make the experience better for their fans. and then they will think about the concert threat and discussions will often close at that point because they have heard or been threatened in a way that they will know they will lose concerts if they move away from ticketmaster. one thing that is particularly scary is in response to some of the oversight that has happened recently, we have seen ticketmaster move from five years, which used to be the standard contract, to 10 years. they are trying to lock things down so if there is more pressure, they have signed these decade-long deals. if we want competition in this industry, that is already hard to change, longer contracts make that harder. sen. klobuchar: mr. lawrence, what was the amount you said the percentage of your tickets, the highest of these? mr. lawrence: typically we will see 40% were closer to 50% added - or closer to 50% added on top. we have seen outlandish numbers. we had a show last spring where there was an 82% fee. we don't even know what it is going to be. sen. klobuchar: you heard mr. lawrence. with ticketmaster's market power which we know exists, why haven't you done more to reduce fees? mr. berchtold: as i noted, the fees are set by the venues. the live nation venues have fees consistent with other venues that cover the cost of operations of those venues. sen. klobuchar: mr. lawrence wants to reply. mr. lawrence: we asked the venue what the ticket fee is going to be. they always certainly don't take responsibility for the fees. i don't know who is doing the fees but we asked that question to the venues and they say not only do we not choose what it is, we don't even know what it is. i don't know where the answer lies. sen. klobuchar: westward. -- last word, transparency would be nice. ms. bradish: absolutely. sen. klobuchar: clearly there is not transparency when no one knows who sets the fees. senator cornyn. sen. cornyn: thank you very much. this is obviously a concerning status quo. a couple years back during the height of the pandemic, we wondered if any of these venues survive, including my fate -- including my state. in texas. it is great to see the work that congress did would save our -- with save our stages and the work we did have a positive impact on preserving these smaller venues. so that small businesses can continue to provide entertainment. what we have heard today does cry out for some response by congress. i am not sure the antitrust laws are the best tools in our toolbox. that is something we will be talking about more in the future. mr. berchtold, you said you have an artist first business model. you later said you would never put your interests ahead of theirs. is that your testimony? mr. berchtold: yes, that is the approach of our business. it is about getting the artist on stage and letting them connect with their fans. we believe if we act that way we will have a long and successful business working with artist. sen. cornyn: without the artist, you would not have a business? mr. berchtold: that is correct. sen. cornyn: mr. lawrence, has that been your inexperience -- been your experience? mr. lawrence: generally the people who work for live nation absolutely try to be partners with us to put on the best concert. the places where you could feel like it is not artist first is in the structure some of the -- of the way some of the deals with the artists -- when you look at the settlement sheet which breaks down who gets paid what, some of those line items where we have no say in setting the prices of those things. yet some of them are live nation setting the price for things they are paying other entities which directly impacts the profit pool. from which the artist's pay is being derived. i would not say it isn't artist first, but that is what i feel we are not aligned in our incentives. sen. cornyn: for your band to make six dollars out of a $42 ticket price does not strike me as artist first. mr. lawrence: i would agree with that. sen. cornyn: mr. berchtold, you talked about how if you venues -- how few venues live nation owns. but the truth is you have these long-term exclusive rights contracts with venues you don't own or you have some partial ownership where you have effective contractual control over those venues. is that correct? mr. berchtold: if i could differentiate on the ticketing contract versus the promotion side. on the promotion side of the business, there are roughly 4000 venues in the united states. roughly 200 of them we operate and often don't own. we have roughly 40 more buildings with which we have an exclusive promoter relationship. that is a small portion of the market. sen. cornyn: whether or not you own of the venue, you have effective influence and control over what the venue charges in terms of the ticket charges. -- the ticket price. mr. berchtold: in roughly 5% of the market, yes. sen. cornyn: mr. mickelson, why is it hard for the consumer to get access to tickets and who benefits from less consumer access? not the artist, i assume? mr. mickelson: that is a good question. let's take the taylor swift fiasco as an example. the fans had to sign up to a -- through verified fan mail in order to buy a ticket. ticketmaster knew the demand was enormous. larger than almost any other show. when they set the tickets up for sale, there are two ways you can do that. you can set tickets so they are best available, which means you will sell more because the fans don't have a choice, or you can do pick a seat -- where it slows the process down. the process, when it is slow down, increases the money that ticketmaster makes because they make money on fees. as the ticket prices go up, ticketmaster makes more to that. it is to their advantage to slow the process down and to do pick a seat so it creates the frenzy that drove the prices up which again they are getting, ticketmaster is a getting percentage of that fee. the higher the ticket price, the higher the fee. so i think it was driven by the corporate bottom line in the taylor swift fiasco. ticketmaster's bottom line. sen. cornyn: time is up. thank you. sen. klobuchar: senator whitehouse. sen. whitehouse: let me start by offering a rhode island welcome to mr. lawrence. mr. lawrence: seven out of eight of our bandmembers went to brown university. sen. whitehouse: that is impressive. what were your favorite venues? mr. lawrence: we mostly played -- as-220. we mostly played at house parties on campus. that is where we got our start. we also played recently at that - at fete musical. sen. whitehouse: i am proud to have you in the middle of this. mr. lawrence: thank you. sen. whitehouse: you mentioned that when artists like you play live nation venues, you are also required to use ticketmaster and a live nation owned promoter. if that were not the expectation, what would the difference be for your band and your fans? mr. lawrence: if we had the ability to weigh different offers, we would be able to see more of an apples to apples comparison. you are correct in saying when we pick a venue, it is a venue that is either the exclusive promoter or the owner of. there is no opportunity but to receive a deal we have no ability to negotiate from live nation. and, yes, tickets have to be ticketed by ticketmaster. it would be great to find out if it was this ticketing company, it might be a different fee. i know the venue sets the fee which has not been our expense. sen. whitehouse: can you say how that has not been your experience? mr. lawrence: there has literally not been a time in our career where we have played at a live nation venue where we had any opportunity to not have live nation be the promoter or not ticketmaster be the ticketing company. sen. whitehouse: have you heard of other artists who have been able to figure out a way around that? or do you think all artists are up against the same wall you described? mr. lawrence: as far as i am aware, no one has had a different experience than me. i know at the highest level there is an opportunity to have another promoter to come in. that is not my level. sen. whitehouse: in time, mr. lawrence. thank you active chair, -- acting chair, klobuchar, for the hearing. sen. klobuchar: mr. lawrence has been getting a lot of questions and i know your daughters are watching. we will ask you a question on the second go around. that is a little cute for you. next we have senator blackburn. sen. blackburn: thank you for being here. in tennessee this has been an issue where there is a lot of conversation about it. we have a lot of people that are unhappy with the way some of this has been approached. there is frustration. we talked yesterday about and -- the bots and how they impact ticketmaster's operations and you have blamed bot attacks on causing the crash during taylor swift ticket sales. ticket vendors seem to view bot attacks as normal to their operations. there was an act that got past -- passed, signed into law, senator schumer carried that over. the ftc has only enforced this once. they have had the authority to do this since 2016. this is unacceptable. senator blumenthal and i are going to do more on this entity -- at the commerce subcommittee. i have about four questions and i want to move quickly through this. don't try to just run the clock out on me which i don't appreciate. the data you collect, there is a 2019 report that showed ticketmaster's app has more downloads and active users than its competitors. i bet if i went down everybody would shake their head yes that that is correct. you have the most active user growth that anyone is seeing. i want you to submit the answers to this to me in writing. let's take the orange bowl act -- app which i downloaded last month taking my grandsons. go vols. a big win there. that app is powered by ticketmaster. when you use that, you can use parking, merchandise, access travel sites. you are getting a lot of consumer data out of consumer information. i want to know what are you doing with that data? you told me you block about 90% of the bot activity you get but that is a failing grade. there ought to be people you get advice from because our critical infrastructure in this country, whether it is utilities, electric, water, power, pray -- payment processes, they get bot attacks every same old day -- every single day by the thousands. and they have figured it out but you guys haven't? this is unbelievable. you ought to be able to get some good advice from some people and figure this out. what are you doing with the information. as you get bot attacks, are they coming in here and scooping up consumer information when consumers buy tickets from stubhub and they are required to return to ticketmaster to have their order fulfilled? are you getting their data? what are you doing with it? are you sharing it with these other vendors? what kind of protections are around it? how are you safeguarding it? i would like a response to that in writing from you. that is going to determine how we move forward. the ftc has the responsibility and the authority but you are responsible to the consumers. you are controlling 70% or 80% of the ability of consumers to access tickets to sporting events, to concerts. when i run into any entertainer -- you need to come to nashville. mr. lawrence: we have been there, we played a couple of months ago. sen. blackburn: come on back, make it your home. mr. lawrence: sure thing. sen. blackburn: we need to have an answer for this. yes, the ftc has the authority and the legislation was signed into law. i agree they are not exercising it, but how many times have you called the ftc and said we need your help? mr. berchtold: we will submit in writing the answers to your questions. sen. blackburn: how many times have you called the ftc? mr. berchtold: we worked on an investigation in late 2019 or 2020. sen. blackburn: you called them once? mr. berchtold: that is the time we were able to have the information to work with them. sen. blackburn: why can you not identify a bot attack? you said you have a hard time distinguishing between a bot attack and a consumer. but the local power company down the road can figure out when they have a bad actor in their system. but you cannot? do we need to make sure you have better people around your i.t. team? mr. berchtold: it is an ever-growing arms race in fighting the bots. they are not trying to break into our system, they are trying to impersonate people to get tickets on an automatic basis and putting fans at a disadvantage. sen. blackburn: american consumers. i have one other question if we do a second round. sen. klobuchar: that will be good. i appreciate your questions. next up, senator blumenthal. sen. blumenthal: thank you, senator klobuchar. thank you for your work on this. thank you to everyone being here today. mr. berchtold, i want to thank you for your achievement. you have brought together republicans and democrats in an absolutely unifed - unified cause. unfortunately your approach in this hearing will solidify that cooperation. as i hear and read what you have to say, it is not us. it is everyone but us. the fact of the matter is live nation and ticketmaster is the 800 pound gorilla here. you have clear dominance, monopolistic control. this whole concert ticket system is a mess, a monopolistic mess. the numbers refute many of your arguments. that is the reason we have had two consent decrees and why the justice department is investigating violations of that second consent degree. ticketmaster implied the debacle involved in pre-ticket sales was taylor swift's fault because she was failing to do too many concerts. ticketmaster ought to look in the mirror and say i am the problem, it is me. the reason is quite simply that you are the ones ultimately responsible for the action on -- the astronomically rising prices, the hidden fees, sold out shows, the bots and scalpers. we had an exchange with senator blackburn. you've reported once. an instance involving bots. i agree with senator blackburn that there needed to be stronger enforcement by the ftc. it has taken almost no action against the bots despite our support for the bots act. that is why i am supporting legislation talking about remedies called the boss act, which would require transparency, accountability for hidden fees. will you support the act? mr. berchtold: we would abolutely agree there are a lot of problems in this industry and we have an obligation to do better. sen. blumenthal: will you support the act? mr. berchtold: i don't know all of the specific elements. there are many elements we agree upon. i believe there are some issues we have differing views and we have offered to discuss those and we'd like to continue to discuss those going forward. sen. blumenthal: will you support legislation to require complete transparency, to provide stronger enforcement against bots and scalpers? mr. berchtold: we support all-in pricing. we support greater enforcement and penalties and expansion of the prohibition on bots. sen. blumenthal: the ftc has failed in some of its enforcement duties because live nation and ticketmaster has failed to do reporting to enable enforcement. that betrays the intention that -- the contention that you have been active against it. i think that consumers and artists and venues are all fed up with the system that exists right now. i think to the people that are fed up, i would say continue your criticism. if you are angry and frustrated, you have the power to take -- to demand action and we should take act. -- we should act. if the department of justice establishes consent decree, unwinding the merger ought to be on the table. if the department of justice establishes facts that involve a monopolistic and predatory abuse, there are to be structural remedies -- there ought to be structural remedies. we will see what the department of justice finds. to the ftc we owe the duty of providing resources that are needed for more effective resources. kind of support for action in this area. let me ask you. will you support other kinds of legislation that would enable more transparency in this area? mr. berchtold: as a general concept, absolutely. we support more transparency. i commit if you pass harder laws on bots with more enforcement, i will commit that we will do our part to support that. sen. blumenthal: will you take action against the bots? mr. berchtold: if we get laws that will be supported and have real teeth, we will supported. -- support it. sen. blumenthal: you have power now to take action, why haven't you done it? mr. berchtold: we have a limited level of power on something that has not been consistently enforced. sen. blumenthal: you have unlimited power to go to court under the current bots act which we have supported. we have given you the right of action. you are the only one who has the resources and the knowledge to take effective action right now. why haven't you done it? mr. berchtold: we would love the support of further laws, working with the ftc, getting information on body generated tickets on the secondary platforms. sen. blumenthal: if you are concerned about artists, consumers, and venues and the public interest, you would take action under current law. you have the right of action and the resources and the kinds of legal authority to do it. that is why i come back to where i began. your approach is it is everyone else who is responsible, not us. i hope that approach will change in future. thank you. sen. klobuchar: next up we have senator kennedy and then senator hirono. sen. kennedy: i'm not against big, per se, but i am against dumb. the way your company handled the issue with taylor swift was a debacle. whoever handled that ought to be fired. i hear two things today. i hear some of you saying that we have an anti-trust thing here and that is wrong. from an academic perspective and a consumer protection perspective. i hear others saying live nation is making too much money and we want some of it. but i hear all of you saying you care about the consumer. i take you at your word. how would you feel about adopting a rule which seems to me would satisfy the bot situation. let's adopt a rule -- strike that, i don't want to make it is -- i do not want to make it a suggestion. because i want to think it through more. but let me ask you, what if we adopt a rule that said tickets to a taylor swift concert or mr. lawrence's band's concert are nontransferable? you are not going to have a problem with bots. if you have a scalper trying to buy 2000 tickets, they don't want the 2000 tickets, they want a profit. and it will hold down ticket prices. why don't we do that? don't everybody jump in at once. mr. lawrence: whether it was that or only transferable at face value, i'm not an expert on the secondary ticketing market. from the artist's perspective, we would not make a dollar less. sen. kennedy: you say you care about the consumer, i will tell you what the consumer is concerned about. the consumer is not concerned about how many lawyers can dance on the head of a pin and whether this is an antitrust violation or not. the consumer is concerned about the price. so would you support non-transferability or only transfer it at face value? mr. lawrence: i think it is a very interesting question. ms. bradish: nontransferability is making a judgment in lieu of what the customer needs. sen. kennedy: will you support that? ms. brandish: no. mr. groetzinger: i would not support such a rule. sen. kennedy: how about you, mr. mickelson? mr. mickelson: i would not -- good question. totally support nontransferability. >> we think transferability is important for consumers. sen. kennedy: it is important for the consumers or the middleman? >> if i'm going to a concert with jerry, i want to be able to give the ticket to jerry. sen. kennedy: that is the exception to the rule. a few -- most people will think about that before they buy the ticket. if you want to hold down prices, cut out the middlemen and a middle woman, cut out bots, they -- make it nontransferable or only transferable at face value. couldn't bruce springsteen say i have got market power, i'm going to set this price for the ticket and set this price for the service fee and it is going to be nontransferable? couldn't an artist do that. >> for certain. some artists have done that. sen. kennedy: problem solved. how about that? mr. berchtold: we support any artist's right to make a -- sen. kennedy: do you support nontransferability? mr. berchtold: yes. sen. kennedy: a big part of your problem is solved. if you care about the consumer, you hold the price down, you cut out the middleman. we still have the problem of your colleagues saying you are making too much money. some of them say you're making too much money and we want some of it. i hear others saying you're making too much money and that is hurting the consumer because those fees get passed on. if you care about the consumer, cap the price. cut out of the bots. cut out the middle people. if you care about the consumer, give the consumer a break. not every kid can afford $500 to go see taylor swift. i would like to see some of the other major artists step up and say we are going to support nontransferability and we are going to cap the fees that are added on here and make sure the artist is paid a fair price. everybody else can make a profit. if we do that, now we have done something. now we have gone through how many lawyers can dance on the head of a pin and whether the ftc can be involved. we know that will happen sometime in the next century and whether something is a technical violation of the antitrust law which we have to mitigate. -- to litigate. my work here is done. sen. klobuchar: thank you, senator kennedy. senator hirono. sen. hirono: very briefly, you could you -- could you expand why you would not support nontransferability. ms. bradish: it goes from a regulatory issue to something that should be a competition issue. if we solve the competition issue, customers will get what they want. it doesn't get to the heart of the matter. >> we would look at it and it -- in a couple of ways. one is a property rights issue. as the owner, i should have the ability to transfer that at the market rate. a gao report said a majority of the tickets on the resale market are going for under the market value. while i would contend i am not going to pay $500 let alone $5,000 to see taylor swift, the secondary market allows artists like the band lawrence who are selling to smaller venues and growing, the ability to grow this venues, especially when those cases, where individuals are able to use their ticket. >> caps on fees like we're talking about. it greater transparency that we receive on the end of the night. i could list 10 things about the way those are formatted and broken down in a way that feels not totally ideal and fair to artists. >> there are a number of things we could do. do things like this for you, being able to negotiate better, do we have to change any laws? >> i think we need to trust -- we need to give the agencies the resources and legislation that will enable them to attack practices like this. so yes, we need to support resources to the existing agencies and the existing laws and we should consider other laws like senator klobuchar's law antitrust laws. >> you testified that there should be a presumption as we do for horizontal mergers. what would that presumption be for vertical mergers? >> we could look at the share in a particular market. we could the ability to exercise power in another market downstream or upstream. there are a number of ways to get at the same problem, but the idea is that you give the doj a foothold to be able to bring the case before a court. to be able to say that this is illegal. >> do we need to amend the sherman act, or do we need to strengthen the clayton act section seven? >> i think the current clayton act and sherman act don't have the presumption for mergers so we don't necessarily need to change the fundamental contours of the clayton act and the sherman act. in fact, i would just that the clayton act -- >> the ticketmaster merger has already occurred so what we can do to prevent this kind of market share capture and other vertical measures. i want to mention we been talking a lot about the debacle of the taylor swift situation and back in thousand 18 thousands of people in hawaii tried and failed to get ruto mars to get similar occurrences --bruno mars to get similar occurrence. so you had in 2018, but a few years after the merger, you had a similar kind of situation and you have taylor swift. i'm just wondering what kind of improvements did the ticketmaster system is actually being followed. thank you very much. >> thank you very much for using that example. next up, we have senator holly. >> thank you madam chair. if i can start with you. your company is currently under a consent degree with the justice department. is that correct? >> this is because the justice department says your company repeatedly conditioned and threatened to condition live nation's provision of live concerts on venues ticketing services. is that right? >> they thought were violations. we agreed to extend the degree because we had no interest in being perceived of threatening or retaliating. >> what kind of consent decree? let's talk about what your company is trying -- is doing to try to control the resale market. you are -- pushing something called safed takes. you need your phone for it. it's an app. it generates a barcode that regenerates every free seconds. you can't print it off. you have to use the app for it. >> one of the major investments we've made over the past decade has been shipping, ticketing from a paper ticket or pdf to an on the found digital ticket. it's to eliminate fraud. >> i want to come back to that. once you got the app and somebody has a ticket on the app, digitally transfer it but they can't print and off and resale the ticket on stubhub. is that correct? >> they cannot print it off because the notion opens the susceptibility of fraud and duplication of that ticket. >> you can only resell it through the ticketmaster ecosystem. is that right? >> know those tickets are often resold on stubhub, ct --seat ge ek. >> what kind of scale are we talking about? what percentage of tickets sold on the secondary market are counterfeits? >> the counterfeit ticket has been all but eliminated. we still have a large issue with speculative tickets being sold where the seller does not actually own the rights to the tickets but is selling it to the fan who is unaware of that. the old issue of having the pdf photocopy multiple times and resold has been eliminated. >> how does the resale of the safe ticks, how does that work? if i had a ticket how could i resale it. >> you get put it on stubhub. there would be a buyer that wants to buy the ticket. he would transfer the ticket to the recipient ticketmaster account or nfl ticket to their stubhub account. >> do you have any plans to restrict the resale ability of digital tickets through third-party entities like stubhub or others? >> we have no plans to restrict that transferability. we believe the artist should have the right to set the rules as we were discussing area -- earlier in the best in terms of the nature of transferability. but -- we believe it should be no difference between the rules and whatever platforms can do. >> why it is it good for consumers to limit transferability. i don't understand why it's a good thing for the ticket buyer to not be able to resale the tickets. >> tickets and concert in particular are a unique animal. they wants to deliver value to the fans. the industrial scalping of tickets using lots --bots to illegally gain possession of those tech it's desk tickets and resell them. -- tickets and resell them. >> are there other examples of markets where we limit transferability in that way? >> i am not aware. >> you can't do it obviously with movie tickets, let's say. those are freely transferable. i just worry about the effect on consumers and prices if you tell the consumer who buys her ticket that they cannot turn around and sell it. that is a particularly significant one. it's not clear to me why it's good for consumers. >> we believe it's good for consumers because it would mean that consumers could buy all of those tickets rather than have what is often 20 to 30% of concert tickets purchased by scalpers and put on the second arc -- secondary market. >> let me just quickly ask if i could come i want to come back to this consent decree. what the doj alleged was pretty significant. they said there have been violation of the decree that live nation had retaliated, they violated the language of the degree. it is not normal for antitrust consent decrees to get extended after violations are identified. >> i think it certainly shows the problem they anticipated 2010 has come to pass 2020. it means that ticker -- ticketmaster, live nation is a monopolist. needs to be supervised. i don't think that this changes their incentive so it makes it very difficult in the long run for doj to supervise it. >> you don't think it changes live nation's incentives. what should happen? >> there should be a spinoff. >> very good. thank you madam chair. >> thank you. >> mr. lawrence. don't lose sight. do you want to do nothing with me? what's the other one? is not all about you. just want to point at the fact that we are looking at the time anyway, the youngest member of the songwriters guild mr. nash miss america pageant for the purposes of that movie. >> something like that yet. >> let me ask you. on the issue of transferability. i'm a ticket mr. user. i'm a season holder for the carolina panthers. i like the idea of an artist. maybe that's what taylor swift should have done because it would've avoided the situation we had there. a broad budget -- broad brush policy all kinds of problems to the point, i also think when we talk about scalpers there are scalpers out there. but there are also people that are speculated on the market being able to demand a higher price. it sounds like a market principle. i don't want to get too far ahead of it. i think we have to be very careful only talk about things like that. i'm trying to, clearly ticketmaster and live nation are in the crosshairs. so can you give me two things? i was prompted by the discussion you had with senator blumenthal. tell me what you are doing to address what you think whether or not you believe they are valid, you can see forces working against you. what specifically is ticketmaster and live nation doing to prevent congress doing something to you? >> thank you senator. first, we are here today. we would like to engaged in the discussion about whether policy changes that can be made that can make this a better consumer experience. makes a lot of sense. it's clear up front what price you're paying. we believe there are absolutely deceptive practices that take place today in ticketing. >> out of respect for time, and i'm sure you're already thinking about it, but it's getting ahead of something that's probably but for good faith efforts on euros part, you may get -- your all's part, you may get, mr. lawrence this back to you also. is there a mechanism now where mr. lawrence knows exactly what the underlying transaction forgiven -- four given performance, at the end of the day $30 for one venue, is there any sort of back and reporting to performer saying how the rest this is how it all stacked up and this is how everybody benefited from it? do you have that sort of transparency? >> at the end of the day we've -- we are given a settlement sheet, but that settlement sheet gives that's the base price. so $30, but facility fees where not only does the settlement sheet not show the extra $12. it will sometimes say 27 even though the base price was 30 because the venue also arbitrarily taking an additional three dollars. the sheet we get says the tickets were sold for 27 rather than 30 or even 42 which is bizarre to me. >> that general notion of the settlement is correct. if mr. lawrence and others are not getting the rate card and servers -- service fees upfront, i will look into -- >> looks like it needs to be there on the front end. >> i agree. and there should be total transparency. if there is a facility fee, you should know what that is. we represent a minority of venues. the full transparency should be available. >> and the remaining 20 seconds, what do you want to say? >> transferability is extremely -- extraordinarily important. there are far more side effects to completely excluding transferability and that is something underscored the first part of my remarks. >> as we go through, a hyper competitive market forces. we get into what extent from hypercompetitive to anticompetitive. i think these discussions are going to be helpful to strike the right balance. i'm probably somewhere in the middle. i do think there is work we need to do. some of it has to be self-regulation. thank you madam chair. >> senator cruz. thank you madam chair. thank you to each of the week -- witnesses for being here. whether you go to sporting games, i go to a lot of sporting activities. or whether you go to concerts or go to plays. families like to go out and enjoy entertainment and going through the process of getting a ticket can sometimes be gratifying and a lot of times really frustrating. i start from the principal and free markets are good. if you want to have goods and services delivered to consumers in them -- the most effective way and price competitive levels, i also start monopolies are bad. monopolies historically have hurt consumers driven up costs, reduced options and made the consumer experience markedly worse. i also would make an observation that we've seen it monopolies being willing to be particularly abusive. i want to start with a question from the witnesses and about to start with you and ask in your judgment, is ticketmaster a monopoly? mr. mickelson? >> yes sir, without a doubt. >> it's certainly acting like a monopoly. >> i'm not sure. >> so do you agree with the other witnesses on this panel question mark >> -- this panel? >> we believe that fact is demonstrated i everything renewal, it has multiple credible offers. >> so are they just making it out? why does everybody just perceive you as a monopoly? >> i can't speak to the motivations or points of view, but if you simply look at what is the market power exercise which is perhaps not fully understood in our business. >> how about on the ticketing side? >> what's in the market between 50 and 60%. >> depending on how you counted, does anyone have a markedly different measure of that? >> yes sir. they have 87% of the ticketing contract at the nhl arenas. they have 93% of the contracts at the nfl stadiums. those of the most important venues. he's including. i'll stop there. >> for the texans having such a lousy season and the rockets having such a lousy season and the cowboys losing. the astros did win the world series so i do have something to cheer about. i recognize the frustration. let me ask you. ticketmaster's dominant position in the marketplace, how does it hurt consumers? >> fundamentally by eliminating competition. there's not a vibrant group, dozens of companies competing. >> what does that mean you want to go see a game. how is life worse because there's not a more effective competition in the marketplace. >> it means you are beholden to what ticketmaster and live nation give you. it's working to do it's best for consumers and all of the stakeholders. >> it's a bigger question than just ticketmaster because when you combine live nation with ticketmaster it's a different question. the combination of the two provides them with a different business model than the rest of us independent promoters. we have to make money at putting on concerts. they don't. because they make more money from ticketing and sponsorship than they do from concerts and concerts are a loss leader for them to bring more talent and content to the arenas that they are servicing to get the contracts. >> undercutting the competition in the live performance market and subsidizing it using the ticket revenue. >> yes. >> in here -- and here is how it looks to the consumer. i believe it was the shania twain concert in orlando and the tickets were $227 each, but when she got to the final screen where she had to actually hit the button to make the order, they turned into $291. that works out to a 30% bump on the very last screen of the transaction. she had no choice but to accept that bump. that's how it looks to a consumer. >> it reduces the choice. not just the consumer. but also artists. they don't have a choice. what ticketing businesses they will be dealing with. for others all up and down the supply chain. these kind of behaviors reduce choice. >> the impact is that we have very little say or transparency or choice and a lot of aspects of how our financials are put together. >> and i just want to clarify, good questions about the market percentage mr. michelson and you brought them up because i think people need to hear these numbers. according to your testimony, 87% of billboard top 40 doors 2022 --tours 2020 two were performed at venues owned by ticketmaster. >> yes, 87%. >> do you disagree with that? >> i don't know the numbers that he's talking about. >> we would do that in writing. but that seems to me like that's a lot. >> secondly, another thing that you brought up mr. michelson. 87% of nba teams, 93. sent of -- 93% of nfl teams have exclusive ticketing agreements with ticketmaster. is that right? >> that is correct. the teams are broken down in my testimony. >> dispute? >> that seems inconsistent senator with the information i indicated between 2018 and 2022, 15% of the nfl and nba market. >> i would say we have the leading share in that. it's no mystery. we have the best product. >> we are just doing facts here. do you want to reply to that? >> i wholeheartedly disagree with that assertion. it's not a competition. there's only one real choice. >> 2020, the doj confirmed ticketmaster has been the largest primary ticketing service provider for venues in the united states for at least three decades. i don't think we doubt that. ok. live nation revenue group from 5 billion to over 11.5 billion from 2010 10 2019. is that correct? >> i don't have the exact numbers, but that sounds right. >> ok, then we have, i'm going to quote from a new york times article, 2018. it says this. if it's wrong, you tell me. ticket prices are record high. service fees are far from reduced. ticketmaster, part of the live nation empire, tickets of the top 100 arenas in the country. no competitor has risen to challenge its preeminence. >> as i indicated in my comment, i believe you said that with 2018. effective in winning. >> five off for the number of arenas. >> ticketmaster more than 80% of the nba, nhl and nfl teams. that was around the same percentage will we were first looking at this. >> i just want to dispel this notion that it's not a monopoly and then we can go from there about solution. let's talk about that. you talked about the need to update. we have made headway. at the end of the year, so help so then are not taking on the biggest companies with tape and band-aids when we know there are a number of people who work for these agencies and yet these companies have grown bigger and bigger. but appreciate the support of the united states senate on this front, democrats and republicans. now we have to go to the next step. we have specific things we are working on when it comes to issues like ticket crisis. the issue is that we see the narrowing of the antitrust laws. we need to step back a bit. and look at changes. it will be the changes eight person wants. can you talk about the importance of making it easier to enforce these antitrust laws we have seen 75% of the industry from cap food to caskets see more consolidation? >> case law has narrowed and narrowed and narrowed the window for the enforcers to go after this kind of conduct. anything that will open that window, that will give the opportunity for the enforcers to get at this kind that and this kind of merger activity is going to be what we need. >> anybody want to add? ok. some of today's witnesses we now have raised and we really appreciate all of you, concerns about ticketing, especially you mr. lawrence with very practical things. these smaller things that are harder for you to deal with. we love that. it shows we did something for the day for change. so that's great, but i think we all know that ms. bray dish been pointing out and these things are sometimes bigger than that. let's get what we can right now, but there's bigger things. one of the things we've heard complaints about our so-called drip pricing. when the consumer does not see the full price of the ticket, including fees upfront and waiting until the mere that nearly end of the transaction process to get to the price. should congress mandate all in pricing on ticketing platforms so that the full ticket price is disclosed upfront? >> i would stipulate that. there is likely in interstate commerce reason for congress to act in this capacity. i live in north florida. there are a lot of people from south georgia that come to tallahassee occasionally when the seminoles are having a winning season and so for the extent that i would stipulate there's a window for a congress act even though i would like to state on most issues i am a states person. >> anything anyone wants to add? >> i would like to say your lawyer but it's your bandmates. >> very impressive. go ahead. >> i just wanted to say while the spirit of the pricing thing is a great idea, a concern that i have is of artist continue to have no say on top portion of the fee and then as we talked about, i do have a fee -- have a say in setting the base price. but then there's -- at least in the current system, fans know which is the basic ticket price and which is the fee. it would still be great. >> you want to do something upfront? >> these are the added ticketmaster fees. >> you should be a senator. what you are saying is you want to differentiate on the fees and also want to deal with this. >> i want artist to have a say in this and fees to be lower. under the current system, we have no say and no transparency of fees. >> we have, we also have heard about sellers to sell tickets they don't even have. that's speculative ticket sales. is that something congress should prohibit? >> definitely. you go online, any high demand show and they are selling tickets they do not have. that needs to be banned somehow. something needs to be done. it's deceptive and just not right. >> i know you talked about this idea of spinning off companies. we've all seen this as a remedy that would most likely be coming from the justice department. all we can do is put forward the evidence and these are sworn testimonies under law so that the justice department can look at this discussion, biz -- but this is something that could be looked at because we can legislate on some of these things about pricing, but if you truly have a situation where you have a monopoly of three corners of this triangle which is this combo of the ticketing and the promotions and then the arenas or not all arenas are on the long-term contracts on the arenas. that is also an issue that creates a problem for us. the customers are us -- are trapped in the middle. anything anybody wants to comment about that and how that would impede you from competing? mr. michelson. >> thank you. when i look back at history which also guides us, i look back at the paramount case. u.s. versus paramount in the late 40's where the studios contracted and controlled the actors. they made the films. they had the distributor. and they had the movie theaters they played in. the government broke that up and it became everybody -- it became fairer for everybody else to compete. i think another solution might be maybe no exclusive ticketing contracts to buildings. in europe, in the u.k. -- >> that's interesting. so they don't have that. in europe. ok. >> another difference between the europe and u.s. market is that for the europe soccer teams, they typically don't have concerts. they are not worried about concert prep that they are talking about. those venues actually make the merits, best for their fans and best for their business. ticketmaster hears here, that's only 20%. >> thank you. >> thank you madam chairman. let me just say, we do appreciate you all being here and music city usa need you all to be successful. and this is an issue of fairness whether it is a consumer, whether it is an artist, where that's whether it is a production manager. this is an issue of fairness. we have a system that is not fair. i want to pick up on the issue and you and i discussed this a little bit yesterday. you mentioned the madonna tour and there are tickets are ready already. this is presale. you have zach bryant who is not working with you, but on his tour. you set the secondary market has those tickets. i thought about this last night and worked on my questions. i thought, why is it that these secondary markets are so brazen that they would go ahead and put these tickets up for sale? doesn't it make sense does it? but you know what does, it raises the question. is it is it that they have -- certainly you not going to do anything to them, that you're not going to shut them down, that they just move forward and advertise things they have not yet purchased because they have figured out you will not call the ftc, you will not, -- you have not built the cyberspace necessary to protect the consumer. you are building a treasure trove on these consumers. and then sending them notifications. let's talk about this. why is it that you believe these sites have moved forward with advertising tickets if not -- they have not yet purchased? >> i agree with your assessment that those markets that put out -- >> you agree with my assessment. so what are you going to do about this? are you want to strengthen your protections so that these bots cannot get in there? you told me yesterday, let's talk about this a little bit. you told me yesterday that you have a difficult time deciding what is a bot and what is a consumer. why is it that unit have not developed an algorithm to sort that out, what is a bot and what is a consumer? >> we are continually investing. >> how much have you invested and what is your timeline for securing your site so that consumers note that your -- that their data is secure? >> we've invested about a billion dollars for the past decade. verified fan which -- >> why is it that that data is not protected to the point to prohibit these incursions and these hacks coming in to that information? and as you have precleared these individuals and cast them as a verified fan, what are you doing to protect their information? how do they know their information is secure on your site? >> the bots have not gotten in, but that does not stop them from attacking the system. >> is verified fan safe or not safe? what are we looking at? >> verified fan was effective in making sure that the tickets that were sold were sold to fans. it was an issue of the load on the system from the combination of bots pretending to be human, pretending to get in. >> no let me ask you, that's another thing that i thought about from our conversation yesterday. you said that the only course of action for ticketmaster and identifying a buyer was bot is after the transaction was completed, you said you could not tell it until after. tickets in their cart and then during the checkout process the tickets leave the cart and i asked why you would not empty the cart of the bot and you said it's hard to figure this out until the transaction is completed. why is it that you can only do that? why can you not algorithmically flag these suspicious transactions during the process because once they've got that, then the consumer can't get that ticket. once they are into somebody's cart and you are processing that cart, then that's not available to the consumer so without the respect, you have not solved your problem by saying we flag it at the end, the issue is you have got to beef up your system, your verification system. you've got to strengthen your protection. it sounds like you need good advice on how to follow some of the protections that are there for financial institutions and credit card processors and health care institutions and utilities and we are hopeful that you are going to be able to do that. we need all of you to be successful and to be fair. by the way, how is nashville. >> thanks so much. we've had a lot of talk in the last two rounds about restrictions on the ability of consumer purchaser of a ticket being able to sell it to someone else. a lot of people think that somehow a solution. it's a nightmare dressed as a daydream. i don't think we have to go there. there are a lot of complaints about doing this. no one is particularly product -- fond of scalpers, but this is not about scalpers. this is about the purchasers of the tickets themselves. they may have perfectly legitimate reasons whether it's a change of plans. there are a number of states including new york, illinois and utah, we have laws restricting these things. in utah, the ticket transferability act requires 90% of tickets be transferable. mr. newsom, i will start with you on this one. do you think federal policymakers have a similar approach with this or do -- or is this particular issue best left to the states? >> thank you senator and i would reiterate the comment i made earlier about interstate commerce. you are going to have those from out-of-state purchasing tickets to an in-state concert event, sports stadium so there is a role for the congress to play in this. >> you not suggesting that there would be a dormant commerce problem? >> no, but i do recognize the efficiency by a federal solution as opposed to a 50 state password in this round. >> the most common justification that we hear when this sort of thing comes up about ticket transferability is that artists want it. the artist, how the argument goes wants to stop scalpers and help their friends. there followers. this at really sound like something that you would do in defense of the very same people you want to buy your ticket is tell them if you have change of plans, you are out of luck. certain other actors, including in some cases, artists sharing monopoly rent. >> exactly. and i think what this points out is that when we also have to look at the possibility that it has another effect. >> right right. sticking to the issue of ticket transferability. it seems to be carried transferability --peri transferability by preventing legitimately sovereign ticketing agencies from gaining traction. if you are stopping the jetta met secondary ticketing companies -- stopping legitimate secondary ticketing companies, who could rise up and potentially challenge ticketmaster. do you share that concern? >> reducing transferability exacerbate that problem. if the incumbent were to allow transferability, only allow fulfillment on platforms. >> right. if i purchased a ticket on ticketmaster, is that my ticket. and if that's my ticket, isn't that my property to use or dispose of or transfer as i deem fit? >> senate seat, i think this discussion on transferability -- senator, i think this discussion on transferability, the harvesting of tickets disrupts the relationship between the artist and the fans and as we submitted one of the notes with a letter from garth brooks, who was well-known of being one of the leading advocates of providing a great show and great value for his fans, card specifically the scalping that takes place, the origin of the problems that we have. >> there are other issues of course. i don't think he's necessarily considering the consumer welfare standard or the clayton act or the sherman act when making this statement. will you on behalf of ticketmaster commit right now to having fair, nondiscriminatory api access to legitimate ticketing services to facilitate safe and easy transfer of tickets? if not? why not? >> we believe the artist does have the right to set the rules i which ticket transfer takes place in today's environment of scalping. second, there needs to be the maintenance, the digital right master that is held centrally and we are not going to put that out in the wild. >> i would like to get a response to that and just talk about how competition with ticketmaster has infected generation. >> we are the nfl, where ourselves, ticketmaster. there's no technical reason. just know manifest reasons that could not exist in other venues. i'm sorry. i forgot your other question. >> tell me how competition with cop -- with ticketmaster impacted innovation in the ticketing space. >> it severely stunted it. i love to have a ton of brilliant, i love -- so many people -- >> so the absence of competition has stunted it to the extent of seeing development of competition. how would that impact innovation to ticketing space? >> makes a really hard for us. we are trying our darndest and make tickets more accessible to fans get people to go more -- go to more events. and then make the choice again. what is the best technology, because they are afraid. it's going to be very hard if not possible that a fair vibrate competitive market. >> my time is expired. >> thank you madam chair. you told me in our last exchange that a safe ticket, digital ticket, could be sold elsewhere for example. but what you didn't say which ethic is deeply relevant here is in order to get the digital ticket, the person who has to buy it has to come inside the ticketmaster ecosystem because the digital ticketmaster ticket. >> that is assigned same if i buy a ticket from a venue primary ticketing provider for and i want to buy a ticket on vivid, the same way. >> is a huge advantage to you because if you are forcing any buyer, we're talking about the resale market. you are forcing any purchaser to come into your ecosystem sign up. i notice by the way that you ever ties from your own website. you ever ties it one of the advantages from the ticket, digital ticket is that it will allow owners to direct -- communicate directly and allow them to engage with the attendees after an event is over. you're talking about data. you're selling the data of all of these people who have not bought direct from you. they got to come into your ecosystem and view your data. that's a tremendous advantage to you. >> it is our policy that if an account is established solely for the purpose of a ticket, we do not use that data for purposes of marketing. >> when you say on your website than anybody who has a ticket that the of it owner will be able to engage with them once the event is over will be able to offer personalized food and beverage and merchandise offers. that's not true? >> in the context of the event itself, i believe there is some ability to reach out to connect. >> once the event is over, you say. how do they contact once the event is over? >> that may not be accurate sir. >> this is on your website. this is how you are advertising your digital ticketing to event owners. >> i will have to take a look at that. it does not sound accurate. >> what is sounds like is a data industrial complex. you the monopoly, using your monopoly on the front end where you are forcing everybody in the resale market to come into your ecosystem effectively. you also have your own resale platform, so basically they are going to have to come into your ecosystem anyway to get a ticket . why go to stubhub when they could come to you directly. you like market power in one market and it looks like you're doing that in multiple markets. resale market, data, you're nodding your head. am i right about this? explain to everybody why that is significant because you commented on this a second ago. you said if you had a player that can force one part -- -- force everyone into one platform, we would have one big problem. isn't that what ticketmaster is doing effectively? >> we were given the stubhub example earlier. the stubhub seller transferring to ticketmaster. create a ticketmaster account, download the app, you are forced to sign up just to receive the ticket that you bought on stubhub. you are forcing everybody just wants to get their ticket on the resale market that they bought from you, you are forcing them to become your customer in order to take advantage of the ticket. that's something. hats off to you i guess were being innovative. this really worries me because this looks like a way to further leverage your market power to expand to other markets. i don't see how consumers when out of this exchange. >> very good. thank you. well said. do you want to have a closing statement? i think we end as we always do with the two of us? please go ahead. >> this is been a really helpful hearing. i appreciate it. each of your comments, is the first time hearing with a band member rather than a lawyer accompanying the witness so thank you for coming as well. this is an important issue. he relates to a lot of things that we confront on this subcommittee from time to time. it deals with the intersection of consumer rights, consumer welfare and antitrust laws. very important that we maintain fair, free and open and a fierce competition. the reason we focus on that is when there's competition, it does two things both of which are very valuable to the average american. it increases quality and it reproduces price. we want those things to happen so that's why we focus as we do on this. i have to throw out in deference to my daughter eliza. that's all i've got to say. thank you. >> i'll throw another win in. i believe she said if you don't do a hearing on this i'm what to call amy klobuchar directly. i want to thank all of our witnesses. i think this was a good hearing because we had both sides of the aisle making very valid points about conversation -- about competition. the first hearing of the entire conference because it was bipartisan. number two, it was about competition. our economy. as i pointed out, 75% of the industry, we've seen more and more consolidation. we have an active justice department. we have provided them funding. but mostly, this has been reflected it is about the events that bring us together. come out of >> people have loved going to see it live music again. to see it live concerts, to be part of that experience. one of our goals regardless of where people are from or what party they belong to is to give them that experience. to make them feel part of a fan base and part of something that makes them feel good or makes them think about the lyrics to a song or makes them just rejoice in being part of our culture. so that is why you are seeing this tremendous turnout here. we are interested in actually doing something and not just throwing popcorn. we have been regretful throughout this hearing and part of that is our desire to move on this issue. as i noted, getting the public's attention on this -- we think the fans that may be outside. i think them for keeping us alive and i think all of you for your work in this important industry. the solutions are there for the taking. some of them are small things that can be done right away. some of them are things that the justice department might order as either part of their oversight with the consent decree or new investigation or new outcomes. some of which have been discussed. some of them are things that we can do right here and of course we are always going to have disagreements in this body. i do not think you are surprised over the best course. but there is general agreement on pricing and transparency and the like. finally, our job is oversight and making sure that our agencies that do the work are funded so they can do it. i am proud of the work that we did at the close of last year to do that. with that, we are going to keep the record open for a week. i want to think our staff for their work on this and in particular, mark and avery behind me. and also the senators staff for their work on this, as well as senator bradley's staff over the many years on this issue. senator durbin for allowing us to have this hearing when we do not even have the subcommittees formed yet. so we can get working on this right away. with that, the hearing record is going to remain open for one week, until january 31, 2023. thank you very much. that hearing is now over. and adjourned.
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