Antitrust Institute Urges Judge to Probe Political Motives Behind Live Nation Settlement in Tunney Act Filing

The American Antitrust Institute is urging the federal judge reviewing the Justice Department’s settlement with Live Nation and Ticketmaster to investigate whether political considerations influenced the agreement, arguing that the Tunney Act gives courts authority to look beyond the written terms of an antitrust deal when credible questions about an undisclosed “side deal” exist.

In public comments filed Sept. 4, AAI argues that reports surrounding the settlement raise enough questions about White House involvement, Live Nation’s lobbying and discussions involving the Kennedy Center to warrant further scrutiny by U.S. District Judge Arun Subramanian.

The organization stops short of claiming that a quid pro quo has been established. Instead, it argues that determining whether one existed is precisely the kind of inquiry Congress intended courts to be able to make when it created the Tunney Act.

“If the settlement together with a side deal allows Ticketmaster to remain integrated with Live Nation in exchange for Live Nation’s assistance in improving bookings at the Kennedy Center or other similar side benefits, as those reports suggest, then the settlement cannot be within the reaches of the public interest as a matter of law,” AAI wrote. Their full comments are included at the end of the article.

That argument adds a different dimension to a growing collection of Tunney Act objections that have largely focused on whether the settlement itself does enough to restore competition.

SeatGeek, AEG, Louis Messina, the Progressive Policy Institute and other commenters have attacked provisions that would leave Live Nation and Ticketmaster integrated while relying heavily on new restrictions governing the company’s conduct. AAI is asking an earlier question: whether the court can investigate why DOJ accepted that outcome in the first place.

AAI Says Political Questions Are Part of Tunney Review

AAI’s filing challenges a position the Justice Department recently advanced in another closely watched antitrust settlement involving Hewlett Packard Enterprise and Juniper Networks.

In that case, DOJ argued that courts reviewing consent decrees under the Tunney Act should focus on the terms and competitive impact of the proposed judgment rather than probing the government’s motivations for settling.

AAI says that interpretation is far too narrow.

The group traces the Tunney Act itself back to concerns over political influence surrounding the Nixon administration’s settlement of an antitrust case against International Telephone & Telegraph Corp. in the early 1970s. Congress enacted the law in 1974 amid concerns that politically powerful antitrust defendants could exert influence over settlements that were then effectively rubber-stamped by courts.

AAI argues that history is particularly important now because the statute requires public disclosure, public comments, lobbying disclosures and an independent judicial determination that a proposed antitrust settlement serves the public interest.

A court required to make that determination cannot simply ignore credible evidence that relief may have been compromised for reasons unrelated to competition, AAI argues.

The filing points to an earlier Microsoft antitrust case in which the Justice Department itself made clear that Tunney Act review could reach an undisclosed side arrangement. AAI argues that DOJ’s more recent position is difficult to reconcile with that history.

Put more simply, AAI says the court should not be reduced to evaluating only what DOJ and Live Nation chose to put on paper.

Kennedy Center Questions Move to Center of Fight

The argument arrives after months of reporting and litigation over how the Live Nation settlement came together.

TicketNews previously reported on findings that President Donald Trump personally instructed a senior DOJ official to settle the case after a Feb. 27 Oval Office meeting with Live Nation CEO Michael Rapino.

That meeting was primarily arranged to discuss improving bookings at the Kennedy Center, according to the Wall Street Journal. Trump also asked Rapino about the pending antitrust case, which was scheduled to go to trial days later.

Settlement negotiations accelerated shortly afterward, eventually producing an agreement that kept Live Nation and Ticketmaster together despite DOJ’s original demand for structural relief that included a Ticketmaster divestiture “at a minimum.”

The Journal’s reporting did not establish that Kennedy Center assistance was traded for a more favorable antitrust settlement, and Live Nation has rejected suggestions that its contacts with the administration were improper.

AAI nevertheless argues that the combination of circumstances warrants an investigation.

Its filing identifies 17 factors it says raise questions about how the deal was reached. Among them are Live Nation’s lobbying effort targeting senior administration officials, Trump’s meeting with Rapino, the reported exclusion of DOJ’s trial team and state co-plaintiffs from negotiations, the abandonment of structural relief and the involvement of White House officials in settlement discussions.

AAI also points to what happened after DOJ left the case.

Thirty-four states rejected the federal settlement and continued to trial, ultimately securing a unanimous jury verdict finding Live Nation and Ticketmaster liable on the major antitrust claims presented. The states are now pursuing remedies that include separating Ticketmaster from Live Nation.

Former DOJ trial leader David Dahlquist has also said publicly that he was not consulted about the settlement and still believed the government was going to win when the deal was reached.

AAI argues that sequence makes it harder to explain DOJ’s retreat from structural relief as a conventional response to a weakening case.

Judge Has Already Left Door Open to Discovery

The issue is not entirely theoretical before Subramanian.

Non-settling states previously asked the judge for discovery into the settlement and the circumstances surrounding its negotiation. DOJ and Live Nation opposed that effort, arguing in part that the court should not open a broad inquiry into settlement deliberations.

Subramanian denied the states’ initial request in August, but did so without prejudice because the states had not presented specific document or testimony requests for him to evaluate.

More importantly, the judge expressly declined to rule out Tunney Act discovery altogether. He said discovery could be available “within reasonable bounds” and directed the states to formulate “narrow and targeted” requests that could be brought back to the court if the parties could not resolve them.

AAI’s filing effectively supplies a broader legal argument for why such an inquiry can fall within those bounds.

The organization is not asking Subramanian merely to decide whether politicians were involved in the case. It argues that their involvement becomes relevant under antitrust law if DOJ surrendered relief intended to protect competition in return for some unrelated political benefit.

AAI says the court’s role is to determine whether the government “gave up more than it need have or should have” when settling the case.

HPE Case Offers a Recent Warning

AAI also points repeatedly to the recent HPE-Juniper case, where a Tunney Act proceeding exposed unusual intervention in an antitrust settlement by senior DOJ officials after Antitrust Division lawyers had rejected weaker settlement proposals.

Discovery in that case revealed extensive lobbying, disputes inside DOJ and an HPE “Invest in America” proposal involving commitments valued by the company at tens of billions of dollars.

U.S. District Judge P. Casey Pitts ultimately approved the HPE settlement in August, finding that its competitive provisions remained within the public interest. But he credited the intervening states with performing an “invaluable public service” by uncovering details about how DOJ leadership overrode Antitrust Division staff and reached the agreement.

AAI believes that inquiry did not go far enough, particularly regarding whether anything survived from the proposed investment commitments after they disappeared from the formal settlement.

It is urging Subramanian not to make what it views as the same mistake.

“This Court should fully investigate credible suspicions of improper settlement motivations and an undisclosed side deal,” AAI wrote.

The filing does not itself prove that such a deal existed between Live Nation and the government. But it asks Subramanian to hold that the Tunney Act does not require him to look away from the question.

That could become increasingly significant as the court weighs a federal settlement that preserves Live Nation and Ticketmaster’s integration alongside a separate state case in which a jury has already found that the companies illegally maintained monopoly power — and the states are asking the same judge for the structural breakup DOJ abandoned.

PPI’s Tunney Act Submission (PDF)