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Price Fixing Concerns in the Era of COVID-19
As we have seen in recent weeks, prices for a wide variety of products and services are rising. A group of senators are encouraging the Justice Department to be especially vigilant to prevent exploitation of consumers as some industries are seeing major failures among competitors whose balance sheets did not give them the support to survive the global pandemic. One such significantly impacted industry is entertainment, specifically concert and event ticketing businesses. In 2019, Live Nation and Ticketmaster merged and eventually signed a consent decree indicating that they would agree to certain conditions that would allow a preservation of competitive elements in the live event business. The consent decree goes through 2025. Basically, the company agreed not to engage in monopolistic competition or escalate ticket pricing.
Live Nation is now the world's largest concert promoter. With ticket prices rising, some are questioning if the consent decree encourages fair and competitive ticket pricing. Price fixing is possible based on mergers and the elimination or acquisition of smaller competitors. Not unlike many aspects of our economy, the live concert market has been shut down by COVID-19. There may be a return of concerts through live streaming, but the short-term future is uncertain and many smaller competitors who have more limited cash reserves face an uncertain future. Live Nation indicates their financial position, with no additional revenue this year, could get them through the remainder of the year. The senators are concerned that "When Americans are ready to go back to stadiums, theaters, and concert halls, they deserve a competitive marketplace that offers value, choice, and a variety of entertainment experiences." As we weather this global pandemic many are concerned that smaller, entrepreneurial businesses will not have the financial capacity to survive.
When we re-emerge and fully reopen, there is great uncertainty about what the competitive landscape will look like.
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