Ticketmaster says it fired two employees in 2017 responsible for the breach against a competitor. Photo: Jevone Moore/Zuma Press By
Ticketmaster will pay a $10 million fine to help resolve federal charges that former executives and employees unlawfully accessed a competitor’s computer systems in an alleged scheme to gather business intelligence.
The fine was part of a deferred prosecution agreement with federal prosecutors in Brooklyn filed Wednesday along with a five-count criminal information charging Ticketmaster with computer intrusion and fraud offenses. Under the agreement, Ticketmaster—a subsidiary of concert giant Live Nation Entertainment Inc. —must report to the Brooklyn U.S. attorney’s office on new compliance measures for the next three years. If the agreement is breached, the company could be prosecuted.
In a statement, Ticketmaster said two employees responsible for the breach were fired in 2017. “We are pleased that this matter is now resolved,” it said.
Federal prosecutors said Ticketmaster executives and employees used login credentials for another company—identified as a U.K.-based online-ticketing platform that allowed artists to sell tickets before general sales—in a coordinated effort to “choke off” the company’s business.
The U.K.-based company wasn’t named in court filings, but is identifiable as Crowdsurge, a company that merged with Songkick in 2015. In 2018, Live Nation reached a $110 million settlement with Songkick’s parent company and agreed to acquire it to resolve a lawsuit alleging that Ticketmaster had used illegally obtained information to compete with Songkick.
At the center of the scheme was a former Crowdsurge employee who went to work for Live Nation in 2013, and who prosecutors say encouraged his new colleagues to use login details to gather information on their competitor. The former employee wasn’t charged or named in court filings. Another former Ticketmaster executive pleaded guilty in 2019 to one count of conspiracy in connection with the alleged scheme, which lasted from around 2013 to 2015.
According to prosecutors, the Live Nation and Ticketmaster employees illegally monitored draft ticketing webpages designed by Crowdsurge, and created a spreadsheet to track the company’s clients and offerings so they could try to dissuade the artists from using their competitor’s services.
Live Nation and Ticketmaster are facing legal scrutiny on several fronts. Earlier this year, the New York Attorney General’s office said it would look into complaints about refunds for shows postponed because of the coronavirus pandemic. Ticketmaster has denied changing its refund policy.
The company earlier this year settled with the U.S. Justice Department over its ticketing practices, following allegations that Live Nation had tried to strong-arm concert venues into using Ticketmaster.
Live Nation said in January it strongly disagreed with the Justice Department’s allegations and said the company had settled “to make clear that it has no interest in threatening or retaliating against venues” that choose other ticketing companies.
—Anne Steele contributed to this article.
Write to Rebecca Davis O’Brien at [email protected]
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