Ticketmaster has agreed to pay $10 million as part of a settlement with the federal government. The fine is part of a deferred prosecution regarding a scheme where Ticketmaster accessed the computers of competitor Songkick. Zeeshan Zaidi, the former head of Ticketmaster’s Artist Services division, pleaded guilty to conspiracy and wire fraud charges related to the case in 2019.
Songkick is a platform for fans to track music artists' tours. For a few years, Songkick allowed artists to set aside a percentage of their tickets to be sold on the platform as presale tickets. Ticketmaster wanted Songkick gone and Ticketmaster executives talked about ways to “choke off Songkick,” “steal back one of Songkick’s signature clients,” and “cut Songkick off at the knees,” according to the plea deal.
Ticketmaster did this by using passwords provided by a former employee to snoop on Songkick. From 2013 to 2015, a former Songkick employee granted Ticketmaster access to Songkick’s back end.
“Ticketmaster employees repeatedly—and illegally—accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” Seth DuCharme, Acting United States Attorney for the Eastern District of New York, said in a press release. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”
This scheme is similar to that used by the St. Louis Cardinals to break into the Houston Astros' player scouting system, and is an obvious violation of the Computer Fraud and Abuse Act, a federal anti-hacking law.
According to the plea deal, the former Songkick employee first gave Ticketmaster access to usernames and passwords for the management companies of three different artists. One of the unnamed conspirators encouraged Ticketmaster executives to “screen-grab the hell out of the system,” and cautioned them against accessing Songkick’s toolbox systems.
“I must stress that as this is access to a live Songkick tool I would be careful in what you click on as it would be best not [to] giveaway that we are snooping around,” the conspirator said, according to the plea deal.
Ticketmaster then copied crucial information about what services Songkick was offering artists and the rates they were offering them.
“Zaidi promptly made use of the information to prepare a presentation for other senior Ticketmaster executives that was intended to ‘benchmark’ or compare Ticketmaster’s Artist Services and other ticket offerings against those of, among other competitors, Songkick,” the plea deal said. The presentation included screenshots of Songkick’s tools.
Ticketmaster fired Zaidi and two other executives in 2017. “Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved,” it said in a statement after the Justice Department announced the plea deal.
In 2015, Songkick filed an antitrust lawsuit against Ticketmaster, alleging that the company abused its market power to crush the competition. Ticketmaster settled the lawsuit in 2018 for $110 million and acquired most of Songkick’s assets in the settlement.
In addition to the $10 million fine, the Justice Department said it will force Ticketmaster to “maintain a compliance and ethics program designed to prevent and detect violations of computer Computer Fraud and Abuse Act and other applicable laws.” Ticketmaster also has to check in with the United States Attorney’s Office every year for the next three years. If Ticketmaster screws up during the next three years, Justice said it would prosecute the criminal charges.
The situation is yet another example of Ticketmaster and its parent company Live Nation being shady about ticket allocation and presales.