According to the head of Ticketmaster’s parent firm, who will testify before a congressional committee on Tuesday, the issues with ticket sales for Taylor Swift’s upcoming U.S. tour were caused by a cyberattack that targeted the company in November.
Joe Berchtold, president of Ticketmaster’s parent company Live Nation, will testify before the Senate Judiciary Committee that the halt in ticket sales was brought on by a significant increase in website traffic, some of which was brought on by a cyberattack.
According to Berchtold, for the first time in 400 Verified Fan on-sales, hackers attacked our Verified Fan access code servers during the Swift concert sales. Ticketmaster was “struck with three times the volume of bot traffic we had ever experienced.” Due to the incident, Swift’s supporters and lawmakers turned on Ticketmaster with a vengeance, accusing the corporation of violating antitrust laws and calling for restrictions on its market dominance.
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In his remarks, Berchtold emphasized that the hackers could not illegally get any tickets. Although the bots could not access our systems or purchase any tickets, the attack forced us to suspend or even slow down our sales, Berchtold will claim. In his evidence, Berchtold apologized to Swift and the audience for the poor customer service and described an “arms race” between Ticketmaster and scalpers and online criminals attempting to buy tickets illegally for resale.
In addition, Berchtold will assert that there were additional steps the business could have taken to boost sales: “In hindsight, there are several things we could have done better, including stagger the sales over a longer period and doing a better job setting fan expectations for getting tickets.”
Two sources with knowledge of the cyberattack who were permitted anonymity to discuss the issue before the court claimed that the perpetrator of the attack, which took the company several hours to address, has not yet been found. They contended that Ticketmaster informed the Federal Trade Commission and the FBI of the alleged attack, who are investigating the matter.
Requests for comment from the FTC and the FBI did not immediately receive a response. Swift ticket sales weren’t just a problem for Ticketmaster. SeatGeek sold tickets for five of the 52 concerts, although it also had technical issues. According to a statement from SeatGeek, “Ticketmaster’s outage, recovery time, and ongoing lack of a solution are the results of a monopoly’s complacency.”
“Live Nation/Ticketmaster have eliminated competition in the market, especially in the Verified Fan area, but more generally across their entire ticketing offering. Lack of competition deprives businesses of motivation to develop and solve previous issues.
SeatGeek acknowledged that its customers occasionally experienced “long wait times and, in some cases, temporary credit card charges, which we’re not proud of, but due to more contemporary technical architecture, we were able to make changes to the user experience in real-time to allow fans to continue purchasing tickets.” It’s unlikely that the admission of the cyberattack will ease the company’s antitrust troubles.
Sen. Mike Lee, R-Utah, is the ranking member of the Judiciary Committee’s antitrust subcommittee. According to Lee Lonsberry, a spokesperson for him, “I anticipate Sen. Lee focusing on antitrust issues throughout this hearing.” The Justice Department’s decision to approve the 2010 merger of Live Nation and Ticketmaster, according to Lonsberry, will be a significant topic of discussion at the hearing on Tuesday.
The businesses stipulated in a settlement with the DOJ that they would not discriminate against rivals. After being accused of breaking the settlement terms by the DOJ in late 2019, Ticketmaster consented to extend its terms until 2025. Since the Swift tour problems, Ticketmaster detractors have pointed to the situation as proof that the corporation lacks meaningful competition and has little incentive to provide a high-quality service.
The ticketing market has never been more competitive, Berchtold will tell Congress. Every year, due to competitive bidding, ticketing companies receive less of the economic value of a ticketing contract. In contrast, venues and teams receive more, and Ticketmaster has lost rather than gained market share.
Additionally, Berchtold will ask Congress to reconsider the 2016 BOTS Act so that it permits private organizations like Ticketmaster to file civil lawsuits against people who are reselling tickets obtained through automated means. Additionally, he will advocate for federal legislation requiring that consumers be informed of the total cost of their tickets at the outset of the purchasing process.
The testimony of Berchtold will state that “in this forum where we are here to discuss public policy, we also need to recognize how industrial scalpers breaking the law by using bots and cyberattacks to try to gain tickets unfairly contributes to an awful consumer experience.”
The Justice Department is also looking into Ticketmaster and its parent business Live Nation Entertainment for possible antitrust violations, but that investigation began before the Swift fiasco. Since Ticketmaster’s 1990s legal battle with the rock band Pearl Jam and a subsequent DOJ antitrust probe, as well as the 2010 merger of the two businesses, the companies have been under antitrust scrutiny.
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