Welcome. I'm Teddy Downey, executive editor here at the Capitol Forum. Today, very pleased to be joined by the great Jonathan Kanter, former US assistant attorney general and distinguished professor of policy at Carnegie Mellon University in Washington University. He needs no further introduction. We're going to be talking about Ticketmaster and Live Nation, a few other things. Jonathan brought this case, so I can't think of a bigger expert. Jonathan, thanks so much for doing this today.
Oh, always great to be back as your podcast intern, Teddy.
I know it's been, I miss you. I've missed you. It's always fun to have you on and co-host, I would prefer co-host or something, but intern is definitely more...
I know my place to describe you.
So, let's kick things off here. Ticketmaster Live Nation, we're headed to trial next week. I would love to get your reaction to what's happened so far. You brought this case. You were telling a specific kind of story. How do you think, what do you think his DOJ has done in terms of shifting strategy or what have you? What do you think are some of the strengths and weaknesses about how DOJ's gone about getting to this point?
Sure. Yeah. Let me also just kind of go up to a high altitude here because obviously out there the DOJ, we filed the case. It's very difficult to hand off cases to a new administration and so I've been out in the wilderness doing my thing, teaching, enjoying life and keeping an eye on how things are going. But a bit removed now. And I love the team who's litigating it. A lot of the folks on it were there when I was there and great affection for them and really do wish them the best and there's a tremendous amount of talent. I think the case has morphed a bit just since we filed it. When we filed the case, we told a very kind of a comprehensive story about a company that had accumulated and maintained its power over the course of really over a decade.
And how that power exists at various different levels in the supply chain and how it used that power in one area to reinforce power in another and then power in another area to reinforce power in another and how it had this cumulative effect which if you look at the face of the complaint was based on evidence from the company's own filings including SEC filings. It was about a flywheel, it was about the interaction between and among all of these different services, whether the promotion, the arena, the ticketing and so forth. And so, you know, that story in my view lends itself to modern Section 2, modern monopolization enforcement. And what I mean by that is for a long time in antitrust we got into very narrow boxes, exclusive dealing, tying, raising rivals' costs, things that are very rigid and sometimes, you know, accurate but when we were at DOJ, we took a broader look at Section 2 and what you appreciate is that courts explain that unlike a Section 1 case like an agreement and restraint of trade, monopolization can come in so many different forms and courts have gotten a lot better in recent years like Duke Energy, Adtech and others at looking at the collective behavior of a company and understanding that the whole is often greater than the sum of its parts in the context of how a company behaves, you know, in a continuous way across lots of different segments of the market has a reinforcing and exclusionary effect that is greater than any one act standing on its own. And so when we filed this case it was filed very much in that spirit. I think now it feels a little bit more like a case that's been kind of whittled down to a number of very specific theories that I think kind of lose the overall story.
The importance of, you know, kind of winning in court in a lot of these antitrust cases is really telling a compelling story. So do you think, you know, based on how that strategy has changed, that, you know, Live Nation immediately seized on the promotions getting kicked out, getting dismissed the claims around promotions and saying, hey, a breakup is off the table. You know, we had other experts say, look, this just the history, Live Nation's history of monopoly and the remaining monopolization claims and just some of the, you know, I think sort of like compelling evidence around the amphitheater stuff keeps a breakup on the table and actually makes it still pretty suitable just given again the sort of recidivism of the company, but what's your take on is it harder, you know, let's assume that... Well, actually, I'll just leave it open. Do you think this is still a winnable case, and do you think a breakup is still on the table?
I mean, yeah, of course it's a winnable case. I mean, that's the nature of its surviving summary judgment. Court said it's a triable, winnable case, and, you know, that's going to be up to the finder of fact here to make that determination. But the case is still strong and the story is still there to be told, right? And so, you know, one kind of perhaps addendum to my previous comments is that, you know, even if some of that story has been whittled away, there's plenty of opportunity to still tell it. And when you get into trial, it's a storytelling exercise that sometimes is a bit different than, you know, the kind of more formulaic summary judgment in legal analysis. So there's a story to be told. And then there's a, you know, a context to tell that story, a legal context to tell that story. So there's plenty of opportunity. I, you know, the talented team, I genuinely hope and I'm rooting for them to perform well in court so that they can fulfill their obligations and shine like they have in other cases. So there's a lot that can still happen here. In terms of remedies, I mean, it's still a big story. Let's, you know, while I think some of it has fallen away, it still does hinge on the interaction between and among ticketing and promotions and ticketing and theaters and amphitheaters and focuses on major concert venues. So there's still a big story to be told. The interactions among the various different segments of the market are there, even if I think it has gotten a little bit too rigid in thinking about each market in too much of a narrow sense and a little bit too rigid in defining the conduct into these narrow boxes rather than contextualizing it as kind of broad Section 2 exclusionary behavior. Let me give you an example of that. So the case here talks about tying and exclusive dealing. This was an issue back in the US v. Microsoft case. There were tying and exclusive dealing claims in that case that failed. But the same conduct, the same kind of exclusionary contracts, the same co-mingling of code or tying-like behavior were sufficient to support a Section 2 claim. Because what the court said is that when you're bringing a monopolization case, you don't need to show separate markets for the purposes of tying. You don't need to have the requisite foreclosure for an exclusive dealing case. What you're looking at is a different kind of exclusionary effect. And so one of the things I think that's important in this case is to make sure you don't lose sight of the sort of legal framework that you don't need rigid tying and exclusive dealing to have conduct that might read like similar to tying and exclusive dealing to be illegal for the purposes of Section 2.
How important is it to tell more of a holistic story given that it's a jury trial? Like I can imagine you could, you know, you're in front of a judge. You know, in some ways it's like easier to just say, hey, here's some formulaic stuff, but, you know, you're in front of a jury. How important is that? And, you know, if you're in terms of us watching it, how should we assess if DOJ is doing a good job in terms of making these connections clear for a jury?
I think it's exactly that. I think the discipline of having a jury in the room, even if it's a hybrid case, is about storytelling. It's about right and wrong. It's about a just outcome. And I've always been a big fan of trying to inject jury trials into civil government antitrust. I think antitrust shouldn't be different than other kinds of law. We try lots of complicated cases in front of juries. And that's our system. And by allowing, you know, juries to make decisions, it's a discipline that forces you to distill a case down to its core elements, to make it digestible, to make it accessible, to make it about right and wrong, and to move away from what I, you know, have lamented in the past as becoming an antitrust framework that is too complicated, impenetrable, and often, you know, designed for an insular few who treat it like a math exercise when it really should be anything but that. The antitrust laws were developed over a hundred years ago to address power and to address abuses of that power and accumulations of that power. And I think it's very important to make sure that we don't lose sight of that objective and that when we bring a case to our fellow Americans, we're doing it in a way that, you know, really boils it down to the essence of what the antitrust laws were designed to address.
What do you think about in terms of the types of witnesses that are going to be compelling in this type of case? You know, a lot of people have brought up, you know, Simon & Schuster in terms of getting those authors there to say how they're harmed. Are we going to see something like that with these musicians and, you know, competitive venue owners and managers? What do you think about the witnesses?
The good news is I have the benefit of not knowing, because I'm not there anymore. So I'll be watching with interest along with everyone else. But your observation's important. Again, going back to sort of the premise that we were just discussing about antitrust really needing to be accessible in order to fulfill its obligations to the public. I think we got into a world where antitrust became battles of the experts and courts did not react particularly well to that in either direction. And so the kind of antitrust that we infused when we brought our cases at DOJ and I think turned out to be quite successful is really engaging in the storytelling and using witnesses, people who are kind of, who are living and breathing these issues in an authentic way and letting them speak to it and then using experts to help put that in context when necessary and help explain why the expertise that they have can help understand how something might work or help explain why something that might seem obvious is obvious and consistent with whatever numbers or analysis, you know, might be done really to reinforce a case. And so I think, you know, what I'd be watching for is a case that is really very witness heavy, storytelling heavy, and relies on those kind of first-person accounts for what happened in whether something was good or bad, harmful or not, exclusionary or not, bullying, those kinds of things. And then the experts really there to help reinforce that message in a more academic way. But really leading with the storytelling and the first-party witnesses first.
One thing that we've always been forced to do in a lot of these cases is evaluate the judge, right? And a judge can be, you know, a lot of judges are pretty deferential to business executives. How big of a deal is it that you don't really worry about that with a jury? You know, I mean, I guess you could have a number of jurors who are deferential to business executives, but yeah. How big, you know, how big of an advantage is it for DOJ in the states that, you know, they don't have, you know, that they can talk to people and actually a company that's, what is it fair to say, it's not very well liked, that people, most people have a pretty good experience of super high ticket prices, I don't know, but what's the, you know, does that create, does that put Live Nation just necessarily on its heels here, you know, sort of as a bit of an underdog?
Yeah. There's a phrase, you know, among lawyers, which is jury appeal. And when a case has jury appeal, it's one that kind of very, you know, it's very accessible to people where right and wrong is on display. And perhaps people's own life experiences, while not creating bias, gives them a frame of reference to understand whether they think behavior is good or bad. And so I think it's, you know, widely recognized that when litigated properly, this case has a lot of jury appeal. And I think judges like it for what it's worth. I think judges, you know, most of them prefer, you know, juries. They like the idea of being there to preside over a case, help understand questions of law, and then let, you know, jurors untangle questions of fact. And I think the lack of that in antitrust has perhaps, much to the frustration of many judges, put too much pressure, too much responsibility on judges when really the process is for the judge to help again address questions of law and then to have juries and others address questions of fact. Now, this is a bit of a hybrid. There's some, you know, questions about what will be up to the judge, what will be up to the jury, but, you know, just having that jury in the room, it makes a big difference.
And in terms of that, I mean, I think the expectation is that the jury will decide on liability and then the judge will decide on remedy. Is that typically how it goes?
There's no typical, right? I don't know that we've had many experiences. And one of the things when I was there, I started is we were going to really try to infuse jury trials into civil antitrust, which is something we hadn't seen perhaps in 100 years. And so it's pretty exciting actually. And I think there's some technicalities that I won't bore you with in terms of what questions should be decided by a jury and what questions should be decided by a judge. This was obviously litigated in the adtech case and ultimately the court decided to try it itself. But, you know, I think it's kind of fun. And so from an observer's perspective, I think it's pretty cool that we have a jury in the room for a government antitrust case, the civil government antitrust case.
Yeah. I know a lot of people are so focused on, oh, is there going to be a breakup? I want to stay on that for a minute because, you know, it is interesting. There's just such a history of Live Nation having dominance, having market power, and then these behavioral constraints not working. Does it make sense? I mean, do you think that that materially affects the ability for a judge to put more behavioral constraints to solve any problems that they might find at the liability stage?
If they get to liability, if they get past liability and get to remedies, then I think, you know, there is a compelling basis for a court to look at the history here and say what has worked and what hasn't. And so I think that will work in favor of the government if they take a swing for a bolder remedy.
