Ticketmaster pays $10 million fine to avoid prosecution in Crowdsurge server hack case

Updated: Feb 22, 2021

Ticketing giant Ticketmaster and its parent company Live Nation agreed to pay a $10 million fine to avoid prosecution for their staff illegally logging onto servers of former rival Crowdsurge. This all started in 2015 with a lawsuit by Songkick, who merged with Crowdsurge earlier that year. Songkick sued Ticketmaster's parent company Livenation for anti-competitive behaviour, but eventually settled the case.

In 2013 and 2014 a former Crowdsurge employee by the name of Stephen Mead was pressured by Zeeshan Zaidi, a Live Nation executive, to hack into the Crowdsurge servers. The goal was to get confidential information about its product and in particular about its pre-sale and anti-touting services. After they acquired Crowdsurge, Songkick sued Live-nation and Ticketmaster for this and other anti-competitive behaviour. They eventually settled all their lawsuits for $110 million, but the US government wasn’t done with Live Nation yet.


After the settlement, federal prosecutors in the US opened an investigation into the hacking allegations. Ticketmaster and Live Nation have now made a deal to avoid being prosecuted, which could have led to criminal charges under the US Computer Fraud and Abuse Act. Under this deal they have to pay a $10 million fine and introduce a “compliance and ethics programme designed to prevent and detect violations” of computer-hacking laws and to prevent the “unauthorised and unlawful acquisition of confidential information belonging to competitors”.


When asked about the case, Ticketmaster claims to be pleased that the matter has been resolved. They stressed that the employees involved in the hack were fired the moment the company found out that they tried to break into the competitors servers.


The hacking story was part of another court case where Songkick alleged Live Nation of using its power to keep the competition out of the market. In particular in the market of promotional online pre-sale of tickets. According to Songkick, Live Nation held at least some of its artists ransom over selling tickets for pre-sale promotions together with companies like Songkick.

Live Nation allegedly did this by adding service charges to those pre-sale tickets and threatening to withhold the act’s entire fee if they didn't agree to pay those extra charges. Because the extra charges made it incredibly expensive to sell pre-sale tickets, it became nearly impossible for artists to work with organisations like Songkick.

 

Source: CMU

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