Ticketera, AEG and ASM Global slapped with $20M lawsuit
A group of event producers and companies dedicated to ticket sales have filed a $20 million lawsuit at the San Juan Superior Court under the Monopolies Act and restriction of state commerce against AEG Management PR LLC, ASM Global Inc., Jorge L. Pérez, TiX.BY LLC h/n/c Ticketera and Manny Morales-Lema.
The lawsuit seeks to eliminate trade restrictions resulting from the alleged illegal exclusive contract between the defendants and to recover damages due to exclusive contracts for the sale of primary tickets at Puerto Rico’s three leading concert venues.
“Neither the company nor I have been formally summoned; therefore, all we know about the issue is what has been published in the media,” stated Jorge L. Pérez, the regional general manager of ASM Global. “Once we are served, the case will be handled by our lawyers. AEG Management PR LLC, ASM Global Inc., and I have always acted in accordance with the law and will vigorously defend ourselves against the unfounded allegations of the lawsuit. We will not make any further public statements about the matter, as we believe that, once the lawsuit has been filed, it should be litigated in the courts and not in the court of public opinion.”
The plaintiffs include ticket vending companies Ticket Center, Ticket Plus, Fastender and Buy a Tix, as well as event producers Rafael Muñiz García de la Noceda, Josantonio Mellado Romero, Josantonio Mellado González, Antonio “Tony” Mojena Zapico, Félix Antonio Muñiz García de la Noceda, ORO Entertainment Corp., Edwin Vázquez Ortega, César Sainz Rodríguez, Acisum Group Inc., Nelson Castro Morales, Rolando Santa Báez and Peter Cruz Pizarro.
“Ticketera’s practices have raised concerns about fair competition, repression of the producer class, and limiting consumer choice. This lawsuit describes Ticketera’s monopoly power and anti-competitive conduct and its impact on the entertainment industry’s ticket sales market,” said Roberto Sueiro, legal representative of the plaintiffs.
According to the company’s statements in the media, Ticketera holds a market share of more than 90% of ticket sales services for the three primary concert halls in Puerto Rico, due to exclusive agreements with the co-defendant companies AEG Management PR and ASM Global.
The three main entertainment venues are the Puerto Rico Convention Center, the Coca-Cola Music Hall and the Coliseo de Puerto Rico José Miguel Agrelot. All are government-owned and managed by the Convention Center District Authority, a public corporation established under Act 142 of 2001. The entity granted an exclusive contract for the administration and management of these venues for five years to AEG and/or ASM, with an automatic five-year renewal (totaling 10 years). AEG/ASM in turn granted an exclusive contract to Ticketera for ticket sales at all venues they manage.
Despite Puerto Rico’s size, the Ticketera AEG/ASM partnership ranks 13th in sales for major concert venues across North America. As a result, the plaintiffs argue, “Ticketera undoubtedly holds a monopoly in the primary ticket sales market for live events in the geographic area of Puerto Rico.”
“This exclusive ticket sales agreement restricts trade in the market for primary ticket sales services. Ticketera’s monopoly power enables it to impose charges for super-competitive services arbitrarily, indiscriminately and without restriction. These trade entry barriers, coupled with anti-competitive acts have ensured that Ticketera’s monopoly power is unquestionable,” the lawsuit contends.
The lawsuit also claims that service fees for tickets are excessive, often ranging from 20% to 30% above the event’s price.
‘It’s the consumer who pays’
“It’s the consumer who pays the price for this monopoly because the average fan is willing to overlook excessive charges and even junk charges to see their favorite artist,” Sueiro noted. “Despite the growing complaints from the consuming public for the excessive fees that Ticketera imposes on tickets, these are inevitable because in the monopoly there’s no other real alternative when it comes to buying a ticket to attend the activity or concert of the artist or event of your choice, which contrasts with markets open to several vending machines, where there is competition and lower and more competitive prices.”
“In unrestricted markets, tickets have fewer junk charges,” the attorney said.
Puerto Rico’s Trade Restriction and Monopolies Act states that consumers have the right to enjoy the benefits of free and open competition, which should lead to better products and services at lower prices, he added.
The plaintiffs suggest that, with the aid of profits from its business, Ticketera has intensified its monopolistic behavior, further constricting the Puerto Rican market. Most event promoters feel compelled to use Ticketera as their ticket service provider, as it is the leading online ticket seller on the island.
“Refusing to sell tickets through Ticketera equates to promoters losing the opportunity to sell tickets optimally. However, Ticketera has adopted a vending exclusion policy, through which it does not allow the sale of tickets together with another vending company, and the producers cannot combine the sale of tickets through the internet with the sale of physical tickets through another vending machine which typically results in higher ticket sales,” according to the plaintiffs.
Although the law permits promoters to use multiple ticket vending options, they argue that anti-competitive practices or a “Tying Agreement” prevents any other ticket seller from competing in the primary ticket sales market at the only venues suitable for top-tier artists. This also prevents promoters from benefiting from competitive prices, they allege.
In the 46-page claim, the plaintiffs allege that Ticketera started giving venues a portion of the service charges imposed on consumers for ticket purchases. This “kickback” can be between 30% and 60% of the service fee, thus the venue may end up gaining at least 30% of these service charges.
“These charges have no justification, given that the producer pays a rental fee to the facility for the use of the facilities. The kickback is only a ploy or deception to charge consumers unnecessary excessive charges,” the plaintiffs claimed.