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Barely a week after the surprise settlement of the antitrust case leveled by the Department of Justice that threatened to separate Live Nation from its Ticketmaster division, Senator Amy Klobuchar (D-Mn.) has introduced the Antitrust Accountability and Transparency Act “to strengthen review of antitrust settlements and ensure they protect consumers, workers, and small businesses,” according to the announcement.
“When the government prosecutes antitrust violations, the goal should be to uphold the law, lower prices, and protect consumers and small businesses,” Klobuchar said in a statement. “In the recent settlement between the Department of Justice and Live Nation, it is clear the American people got the raw end of the deal. This bill — which has support from antitrust enforcers from both sides of the aisle — ensures that courts have the tools to independently review settlements and approve only those that benefit the American people.”
This legislation is cosponsored by Senators Dick Durbin, Cory Booker, Maise Hirono, Richard Blumenthal, Peter Welch, Sheldon Whitehouse, Elizabeth Warren, and Chris Murphy. Companion legislation is being led in the House by Rep. Jamie Raskin.
In an interview with Variety last week, Klobuchar, a forceful and longtime advocate for a level playing field in the live-entertainment industry, called the settlement “weak” and “absolutely disrespectful to fans.” Following the settlement, multiple states elected to continue their individual lawsuits against Live Nation.
According to the announcement, the Antitrust Accountability and Transparency Act includes the following reforms to the Tunney Act:
Apply Review to the Federal Trade Commission. Currently, the Tunney Act applies only to the Justice Department. This made sense when the Federal Trade Commission (FTC) was led by a truly bipartisan, independent Commission with removal protections. But with the firing of FTC commissioners, the time is ripe to extend Tunney Act review to the FTC;
Bolster disclosure requirements. The Act requires (1) the government to explain how the proposed settlement remedies antitrust issues; (2) the government to disclose previous settlement offers and the process for reviewing those offers; (3) the disclosure of side-deals not included in the four corners of a consent decree; and (4) the parties to disclose all communications related to the settlement.
Hold-Separate Provisions. Currently, after a settlement courts may move forward with a merger by combining assets before courts finish reviewing a settlement. Once this occurs, courts are frequently reluctant to order parties to “unscramble an egg” even if a settlement is problematic because doing so is costly and disruptive. To remedy this without creating undue delays for businesses, the Act creates a hold-separate requirement for up to 90 days to allow the court to review public comments and government responses. A court may allow the hold-separate period to lapse or, upon showing the settlement may pose problems, extend the hold-separate order as necessary.
Strengthen Court Review. In addition to the public interest standard, the Act also requires courts to ensure the settlement terms (1) do not pose a material risk of allowing a merger or other business conduct to continue that threatens to violate the antitrust laws; and (2) are reasonably related to the antitrust concerns, preventing the government from using antitrust as leverage in others, unrelated matters. Courts are also required to base their decisions on reasoned analysis and evidence, not merely deference to the government.
Empower State Attorneys General. The bill empowers state attorneys general by allowing them to intervene in Tunney Act hearings as a matter of right rather than spending their limited resources fighting to have a court even consider their perspective.
Voluntary Dismissals. Currently, there is no review process for voluntary dismissals. Where the federal government chooses to voluntarily dismiss a case (rather than settling), the Act creates a process by which state attorneys general can step into the shoes of the federal government and continue the case.
Jonathan Kanter, former Assistant Attorney General for Antitrust, said, “These amendments make clear that courts have both the authority and the obligation to do more than rubber-stamp government settlements. Antitrust violations should not end in weak settlements that leave the public holding the bag.”
“These proposals are welcome additions to strengthen judicial review of merger settlements and ensure voluntary dismissals are not used to circumvent review,” said Roger Alford, former Deputy Assistant Attorney General for Antitrust.
Recently, the Justice Department, over the objection of its Antitrust Division, settled a merger in enterprise networking markets only a few days before trial. The settlement led to the firing of two antitrust officials. One of those officials, Alford, warned that the Administration is engaged in a “pay-to-play approach to antitrust enforcement” and that “the Department of Justice is now overwhelmed with lobbyists with little antitrust expertise going above the Antitrust Division leadership seeking special favors.”
President Trump’s Assistant Attorney General for Antitrust Gail Slater was ousted as well, reportedly in part, because of her resistance to inappropriate pressure by Justice Department leadership over antitrust matters, including the case against Live Nation-Ticketmaster.
The bill is endorsed by Jonathan Kanter (former Assistant Attorney General for Antitrust), Bill Baer (former Assistant Attorney General for Antitrust), Roger Alford (Former Deputy Assistant Attorney General for Antitrust under President Trump); Tim Wu (Former White House as special assistant to the president for technology and competition policy) Randy Stutz (President of the American Antitrust Institute), Bill Kovacic (former Republican Chair of the FTC), Gene Kimmelman (former Deputy Assistant Attorney General for Antitrust), John Newman (Former Deputy Director, Federal Trade Commission), Professor Darren Bush, Public Knowledge, Open Markets Institute, and the American Economic Liberties Project.
At the center of the DOJ settlement is a series of structural changes to Live Nation’s business that will see the company changing its ticketing deals with venues and allowing those businesses to use multiple vendors to sell tickets to fans, instead of working with Ticketmaster exclusively, although venues will still have that option. It will also discontinue its exclusive booking arrangements with 13 amphitheaters across the U.S., and will allow touring artists to use other promoters when performing in its owned amphitheaters.
Variety will have more on the situation as it develops.
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