Last spring, StubHub sued both Ticketmaster and the NBA’s Golden State Warriors, alleging that the team had threatened to cancel the subscriptions of season ticket holders if they tried to resell any of their tickets via StubHub instead of Ticketmaster’s secondary ticket exchange service. But last week, a federal judge dismissed StubHub’s case.
StubHub alleged that forcing Warriors fans to only resell their season tickets through a Ticketmaster service constituted an illegal “tying” relationship in violation of the Sherman Antitrust Act.
Ticketmaster is the sole vendor for new Golden State Warriors tickets, and by having rules that make Ticketmaster the only allowed reseller of Warriors tickets, StubHub claimed that this gave its competitor an unfair monopoly on NBA tickets in the San Francisco Bay Area.
However, Ticketmaster argued that (A) there is nothing illegal about having an exclusive vendor for selling the primary-market tickets to a game; and (B) that — aside from fluctuations in pricing — there is no real difference between secondary-market tickets and primary-market tickets. If these two markets are, in the eyes of the law, reasonably interchangeable, then it’s really difficult to make an antitrust claim.
And the judge agreed [PDF], first noting that it’s okay for the Warriors to only sell its tickets through Ticketmaster, citing precedent that the “natural monopoly every manufacturer has in the production and sale of its own product cannot be the basis for antitrust liability.”
With regard to the secondary market for tickets, StubHub had pointed to the Justice Department’s review of the merger of Ticketmaster and Live Nation, in which the government recognized “primary ticketing services” and “secondary ticketing companies” as “relevant and distinct markets.”
But the judge pointed out that the DOJ was talking about antitrust concerns on a national level — a scope she believes is too broad to apply in this case. She said that StubHub fell short of showing that the DOJ is “of the view that primary tickets to a single team’s games played at a single arena are not reasonably interchangeable with secondary tickets to the same games.”
In a statement e-mailed to Consumerist, Ticketmaster says it is pleased with the court’s ruling. We won’t include the rest of the statement, which is an irrelevant mess of marketing terms like “innovative,” “cutting-edge,” and “superior.”
We’d argue that if Ticketmaster lived up to its own marketing hype, it wouldn’t need to freeze out the competition through (apparently legal) terms that lock customers into using one company for buying and reselling their tickets.