Welcome to the Vergecast, the flagship podcast of classified AI models. I'm your friend David Pierce, and I am doing one of my favorite things to do every year, which is update the software on my giant stack of iPads. Um, this is this is the six iPads that I find myself using on any given day. And I just reviewed the new M4 iPad Air. We have a bunch of Apple reviews coming out this week, the iPhone 17e, the MacBook Neo, which is one I'm very excited about. We're going to talk a bunch about that on Friday. Um, but what I have to do is just test a bunch of chips against each other because all iPad updates are now is new chips. And so I have to update all the software and then I have to sit there and just do the same things on a bunch of screens over and over because this is the glamorous life of a tech reporter. Anyway, on today's show, we're not here to talk about iPads. We're going to do two things on today's show. First, I'm going to talk to the Verge's Lauren Feiner about the Live Nation Ticketmaster trial, which had a week of testimony and then a really, really surprising and kind of fascinating development. We're going to get into that. Then, Hayden Field is going to come on and talk about what's going on between Anthropic and the Department of Defense and OpenAI. We've had 10 days of just absolute chaos between those two companies and that agency about who gets to use AI and who gets to be in charge. And I think there's something bigger happening there that's going to have ramifications for how we think about AI in general. All of that is coming up in just a second. But first, I have to go plug in just like a bunch more iPads. Thank god they're all USB-C. Now, this is the Vergecast. We'll be right back.
All right, we're back. The Verge's Lauren Feiner is here. Hi, Lauren.
So, a delightful bit of inside baseball. You and I have already recorded this section of the podcast. We did it on Friday at 4:00 p.m. Eastern, the latest we could have possibly done this, and then we came back on Monday morning and everything had changed. So, we're we're just we're going to do all of this again. But first, I want you to tell me what your day today, Monday, has been like because today has been the story we are about to tell. Tell me about your day.
Yeah, today I woke up. Um, I saw that there was a Bloomberg report saying that a settlement might be announced in this case this week, US versus Live Nation Ticketmaster. Um, then I saw there was a Politico report saying that the settlement might be announced today, and I was like, 'Oh, I really got to get to court on time.' Um, really hoping there wasn't a line for jury selection or something like that, because when I got there Friday, there was a huge line for naturalization at the courthouse.
So, fortunately, there was no line. I got in before anything happened. Um, the room was a lot more full than it was last week at the end of the week. Um, lots of attorneys, um, from different states and, um, presumably from, uh, defense counsel, all sorts of people there to watch. Um, and yeah, then the judge came in and, um, the the attorney said that they had struck a deal between DOJ and Live Nation. Um, and then that's kind of where everything began for the rest of the hearing.
Fascinating day. Um, so as we record this, it's it's 2:30 on Monday, March 9th. Bunch of stuff might change again, but we're not recording this podcast again. Um, so as as far as it stands right now, it seems like what we know is this deal between the DOJ and Live Nation Ticketmaster. Um, and I we're going to get into what this trial is about because I think the trial in some ways is not over. And and I want to get to the ways in which it is not over, but this particular settlement, uh, as far as I understand, includes $200 million in damages, uh, paid to some people. You'll have to explain that to me. Plus a couple of requirements to, I would say, not break up Live Nation Ticketmaster, but but take little tiny pieces out of it. What what are some of the stipulations here? What does Live Nation Ticketmaster have to do as part of this settlement?
What I have seen about the settlement is from what I've seen in other reports because I was already in court when they did a background briefing on this settlement. But basically, it sounds like they're going to they agreed that if all of the states were to join the settlement, they would pay up to, I believe, 280 million, um, in damages. Um, in this case, um, they would agree to sell a bunch of amphitheaters, um, which was something that the DOJ was saying they, you know, control the monopoly share of, basically. Um, they would agree to let some other ticketers, um, ticket at venues they work at, so they wouldn't have exclusive contracts in those venues. Um, and they would have, um, a cap on certain ticket fees. Um, so those are some of the stipulations in the settlement as, um, we know about it right now.
I think that's a useful place to start here actually because it that gets at a lot of what this trial has been about. And I want to we're going to wind backwards and then at the end of this I'm going to ask you if this feels like Live Nation Ticketmaster got off easy and I have a very clear opinion about this. But let let's work up to that. Um, backing all the way up a little bit. This this trial has been a long time coming. Uh, this fight between Ticketmaster, Live Nation and the government and frankly people who want to buy concert tickets has been going on for a long time, but uh can you just start by sort of explaining the basic allegation of the case against Live Nation Ticketmaster?
Yeah. So basically the case here and the the claims that proceeded to trial basically center around two markets. One is, um, the market for, um, I believe it's for venues, um, like major concert venues like, uh, arenas for example, um, that host a lot of concert events and that, um, a lot of times they have to go through Ticketmaster, um, to get Live Nation shows. That was the allegation there that, um, Live Nation Ticketmaster makes it really hard to use a different ticketing platform and to, um, also get its concerts which are a big deal to venues that rely on, um, concert revenue as a major, um, revenue stream for them. And the other part of it was about amphitheaters and how, um, Live Nation controls, um, a lot of the amphitheaters in the US basically, um, all except one of the larger amphitheaters. Um, and that it allegedly conditions pro, uh, use of those venues on using Live Nation promoters or the people that do the marketing and everything around leading up to the concerts.
Okay. So yeah, if if I'm if I understand the accusation correctly, uh, and and they use the word flywheel in the accusation, which is a thing you hear a lot in these antitrust cases, is basically they have built a system by which every part helps all the other parts and which is impossible to get into. It's basically like Live Nation Ticketmaster controls some of the biggest artists in the world, some of the biggest venues in the world, especially in the US, uh, and a ticketing system that by and large everybody hates. Um, but it it premises getting any of those things on using all of those things. And so in order to book a a very important artist, you have to play by a bunch of other Live Nation Ticketmaster rules and you have to use their platform and accept their fees and all this stuff. And the the people who lose then are anybody who wants to use any other part of the system, right? You and they they will hold these things up as as threats essentially. Like you wrote a story last week about the I think it was the Barclays Center in New York, right? That was basically felt like they were bullied into not using another ticket provider by these very like mafia style threats to be like, 'Well, maybe we'll just take our artists and go somewhere else and maybe we'll never work with you ever again.' Like, wouldn't it be a shame if our great relationship went away because you decided to sign a deal with SeatGeek? And this this seems to be at least in in the allegation against this company just how Live Nation Ticketmaster operates where they're just like, 'We have control of everything. What are you going to do about it?'
Right? And I think the other part of this is that it allegedly erects these kind of barriers to entry for other rivals to enter the market. And you know, that was how we heard from the SeatGeek CEO on Friday about how they started offering Live Nation retaliation insurance so that they could pay back, um, you know, arenas or stadiums that felt like they were skipped over by Live Nation. Um, that you know they could even win their business and these were not really, um, the most lucrative deals for SeatGeek, but they felt like that's what they needed to do to even get a foothold in this market.
Interesting. Yeah. How damning was the testimony, would you say, last week we heard from, like you said, the SeatGeek CEO. It was the the what the guy who ran the company that controlled the Barclays Center. The the like corporate structures of all of this are so insane to me. But basically, some some venue people, some ticketing companies, and SeatGeek, I think, as far as I understand it from your coverage, is like the main alternative being considered here, right? That it's like if it weren't for this monopoly, more people would be using SeatGeek. And that seems I don't know, maybe not dubious, but certainly not like sort of a slam dunk argument so far. But coming out of last week, what was your feeling about how the early testimony was going in this trial?
Yeah, I I mean, I guess coming out last week, I felt like there was some strong testimony for the government there. You know, we're in their case in chief, so we're hearing from their witnesses. This is like, you know, they're running the show so far. Um, Live Nation will get to make its case later, but you know, I thought these were some strong witnesses for the government. Um, that said, you know, there are certain things that the jury might say undermines their credibility. Um, the ex-Barclays CEO was fired, um, at the end of their contract. Um, and he said that was for an unrelated reason, but, um, you know, that might cut to his credibility. Um, that was after he brought in SeatGeek. Um, you know, SeatGeek obviously has a vested interest in having Live Nation, um, brought under fire in this case. So, um, I think there's, you know, reason to, um, question their credibility, but also I thought they gave some pretty strong testimony.
Yeah. Do you think there is some significance in the fact that this settlement happened now? Because, uh, another piece of the strangeness of this case is that there was all of this unrest in the DOJ's antitrust division before this case even started. You've been covering that, too. I mean, I I think there was there was some inkling for a while that this case might never even go to trial in the first place, right?
Yeah, exactly. So, yeah, there was kind of all of this, uh, you know, upheaval at the Justice Department a few months ago, um, over an entirely different deal. Um, some top deputies at the antitrust division were fired for what the department said was insubordination. One of them later went public and said that, you know, there was kind of a scandal within the department brewing. Um, then we saw right before this case started, um, the the then antitrust chief, um, Gail Slater, um, depart the agency and she announced this from her, uh, personal X account. It was very strange. Um, she's a pretty widely respected figure in antitrust law. Um, so to see her depart so close to trial, um, just kind of raised even more flags about what would happen with this case.
Yeah. But then it goes to trial, it appears this is this is a real thing, and then we get a settlement after 5 days. Um, it sounds like from the way you describe it, this may have been a giant surprise to just about everybody. Was it?
Yeah, it sounds like it was a surprise to the judge and it was even a surprise in some in some way to, uh, the lead DOJ counsel on this case. Um, so yeah, basically when this was announced in court, the judge was, um, pretty, um, upset at the parties that this hadn't really come up earlier. And he asked what date was on the signed executed term sheet that has the the details of the deal. Um, and it was March 5th, which was last Thursday. That was a day before he had a a conference in his chambers with the parties, and he said, 'No, the counsel didn't let him know that there was this settlement reached.' Um, so then we ended up with Friday, um, a witness who was only partway done being examined by the DOJ, and now DOJ is no longer on this case, um, if this all moves forward. So it it leaves the whole case in a really difficult position. Um, so he was kind of upset that no one had brought this up earlier. And then, um, the lead DOJ counsel, David Dahlquist, said that he only learned about the signed term sheet this morning when the judge did. Um, and the judge seemed pretty surprised at that, too.
So what what do you make of this? Is this I mean one easy read here would be Live Nation Ticketmaster took one good look at this and decided this isn't going well. Let's get out of dodge. But this is where it comes back to the how good a deal is this for Live Nation question. And obviously there are a bunch of details we don't know. But again, if the basics are it's going to be forced to pay some amount of money to the states, I would say even even if it's $280 million the the maximum that is essentially $5, right? Like that is that's that's nothing meaningfully to that company that is nothing. Um, the bigger things as I understand them would be the, uh, they would have to open up parts of the platform of Ticketmaster to other ticket ticketing companies. Like the the way I think Politico framed it is that SeatGeek would be able to list tickets directly through Ticketmaster which is a thing I have 1 million product questions about but strikes me as the sort of thing that these companies love to do that never actually works out. Like you and I have both covered Google search trials. You were at the Google ad tech trial. Like this very much rhymes with that to me where it's like oh well what you have to do is you have to let other people have access to some of your technology and they're like tight we have all the branding all the distribution all of the other advantages we've already always had. This is going to cost us nothing. Um, then I I can imagine a world in which they have to sell a bunch of venues and that's a meaningful change. Um, but I I don't know does this all add up to much for you? Like does it does it feel like Live Nation got a good deal here or that it saw how bad this might get and decided to just get out?
I mean I I think a it's hard to know exactly without having seen the actual term sheet. Um, so that big caveat. Um, and but I will say that it sounds like, um, Live Nation and the DOJ were having these talks since before the trial started. So I don't think it's like they just suddenly realized, oh this is bad. Um, I think it was January 29th they said there was a preliminary proposal exchanged between the parties but at that point it sounded like they were pretty far apart still. Um, so it sounds like they have gotten closer as this trial has gone on. Um, so yeah definitely possible that they saw that this was going a direction they didn't want. Um, but that said if the DOJ felt confident they were going to get, um, a verdict that they wanted, um, maybe they would have kept going. So, um, it it's hard to know exactly how to read it. Um, but certainly, you know, the terms that have been disclosed so far sound like they fall below what we would have expected that they would advocate for should they have reached a liability finding.
Was the government asking to just split the company to to force Live Nation to get rid of Ticketmaster? Was that essentially the the idea?
I'm not sure if they articulated it that, um, specifically yet because often, you know, it'll be in the next phase. If they get a finding of liability, well, where they'll say exactly what they want. Um, but certainly, you know, I think it was Merrick Garland when he first announced this, uh, case said that they wanted to break up Live Nation Ticketmaster.
Yeah. So, what do you think the people who have been advocating for this are going to think? Like, one one group of people I think everybody is going to think a lot about right now is Taylor Swift fans. Um, because there is I don't know if you can draw an exactly straight line from that time everybody tried to buy Eras Tour tickets to this, but those two things certainly seem to get lumped together that like Ticketmaster crashed because Ticketmaster sucks. Like, to be so clear, Ticketmaster is a bad consumer product that no one likes. And and this is where we are because this company is so powerful. Is that group of people going to look at this and be like, 'Okay, we've we've made some progress. This this thing is going to work. We've pried open the market a little bit.' Is this going to feel like a win to the Swifties?
From the statements that I've seen so far, it doesn't seem like that's how they're going to take it. Um, that said, you know, the other part of this is that there's still 27 states and DC that are planning to pursue this trial. Um, we'll see how that goes. Um, basically today, one of their representatives said they well they ended up filing, um, for a mistrial because you know how all of this happened. They're worried that it's going to prejudice the jury and that, um, there's kind of these logistical issues of transferring experts from the DOJ to the states and getting enough counsel on board and you know just transferring all of the information that they need to have for trial, um, is going to take some time. So, um, they're they've kind of paused the trial for about a week. Um, but, um, we'll see how exactly they move forward with this. Those states have indicated they very much plan to go forward, um, in litigating this case beyond, um, what the DOJ has reached an agreement on.
Is that a sign that all of those other parties don't feel like this is enough that the deal the DOJ struck is just not enough of a remedy to solve their problem?
Absolutely. I mean some of them have said as much. Um, yeah, they they are really still in pursuit of a broader, um, broader finding of liability and broader remedy. Um, and it sounds like they think that they can achieve that if they continue to push forward with this case. Um, but that said, Live Nation is also looking for a broader settlement. Um, and you know, maybe they'll offer more to see if they can get some of these other states on board.
Okay. So, at the risk of asking an impossibly broad question here, um, one of the reasons I was really interested in this case at the beginning, and I think one of the reasons we've covered it a lot is that it is a very sort of straightforwardly understandable monopoly trial, right? And and we've been through a lot of these antitrust trials, and I I I just forever feel bad for you having to sit in the Google AdTech one, which is again a relatively straightforward case, but a really hard one to figure out how to unwind. Um, and we we dealt with the same thing with with Google search where it's like, okay, Google lost that case. Like it's it's very important to remember Google keeps losing antitrust cases and it keeps winning at the remedies because the remedies are are just sort of nonsense for the most part or at least have been so far. This one felt like it it had a very straightforward case with a very straightforward outcome, right? Which is that actually the power of this company is because it it does this, this, and this. And because it does those things, it controls all the pieces and it can it can leverage them against each other. And if you just peel it apart, that leverage disappears in a really useful important way. So it felt like this is the kind of thing that might be not an open-and-shut case, but a very sort of straightforward way to look at how we think about monopoly power in the United States right now. How do we look at that coming out of this settlement? The the DOJ has fought and won these cases, has we're still in the remedies phase on a bunch of things. What do you look at coming out of court today about how the Trump administration thinks about antitrust at this moment in time?
Yeah, I mean I I think there's still a lot more reporting that will come out about how exactly this settlement came to be. Um, but I think it's a big question. Would this same settlement would have would this have happened under Gail Slater or under Jonathan Kanter? Um, I'm not sure that it would have. I mean, it's hard to know what they would have done under these terms, and you know, it's a safer bet to get a settlement than to wait on a jury to figure out a verdict. But, um, you know, it seems like there's, um, a a different kind of strategy coming out here. Um, and you know, the the stated intentions at the beginning of this case, um, were to break up, uh, Live Nation Ticketmaster and, um, that's not really what we're seeing under the settlement that seems to be in play right now.
Yeah, there there's a lot left to come out, but it I will say the the most sensible version of all of this would be that this particular deal has been in the works for a very long time and that actually the DOJ as constituted maybe never thought it was going to finish this case. Like it's just the simplest way to explain this whole thing to me. Uh, and and maybe it's not that, but it is that that strikes me as the sort of Occam's razor explanation of this that a deal almost got done before trial and didn't because like it seems very unlikely to me that a settlement like this gets done between testimony on Friday and this morning.
Yeah. I mean, they were definitely working on this since before the trial started. And I think that's part of why the judge was so frustrated that, um, they impaneled the jury. Um, they had these people, you know, have to step away from work for the past week and thinking they're gonna have to step away.
Had to go to a courtroom all week. It was awful.
Most importantly, I had to be in the court.
They did this to you personally.
I think you should be very mad about it.
