Senators Hint at the Antitrust Oversight Agenda Coming for Big Tech

On January 24, 2023, the Senate Judiciary Committee grilled a top executive from Live Nation, Ticketmaster’s parent company, following Ticketmaster’s very public disaster last month when it was unable to process orders for Taylor Swift’s upcoming tour.¹ The executive, Joe Berchtold, appeared alongside several other witnesses, including representatives from the concert ticketing industry and think tanks, as well as a musical artist.

Unsurprisingly, senators mainly directed questions to Berchtold, asking him what went wrong, why Ticketmaster was unprepared, and whether it’s leveraging its massive market power in the ticketing industry to engage in abusive behavior. The Judiciary Committee has been particularly focused on antitrust issues in the tech sector, and this hearing was only the latest instance in which committee members expressed serious bipartisan concerns about whether current antitrust laws are sufficient and whether current enforcement of those laws is working.  

There were four main takeaways that companies should bear in mind as they prepare for scrutiny from Congress and regulators. We detail each below.

1. Concerns about monopolies in the tech sector is a bipartisan issue.

Concerns about tech companies holding too much power in the marketplace is one of the few areas of agreement between Senate Democrats and Republicans. At one point Senator Richard Blumenthal (D-CT) even wryly said to Berchtold, "I want to congratulate and thank you for an absolutely stunning achievement: You have brought together Republicans and Democrats in an absolutely unified cause." Throughout the hearing, multiple senators commented on the fact that this is a bipartisan issue where senators can work together, with Senator Lindsey Graham (R-SC) saying in his opening statement that the hearing represents “the better nature of the Judiciary Committee.”

In what appears to be a rare area of bipartisan agreement, companies should expect that lawmakers will continue to focus on these issues to show their constituents that they can work across the aisle. With its focus on Taylor Swift, the hearing also drew more public and press attention than normal, and senators will likely want to keep that momentum going.

2. Social media companies will face scrutiny.

At the outset of the hearing, Senator Graham explicitly stated that both Congress and the public would like to see investigations of social media companies, and he suggested the Committee could conduct bipartisan investigations of those companies. More specifically he said: 

[Social media companies] are the most powerful companies on the planet, they have almost unlimited money, they can’t be sued, and there’s no real regulatory environment. So, Mr. Chairman, if you’re looking for something to do together, I think dealing with the problem of social media would be something the Committee should focus on. 

Senator Ted Cruz (R-TX) also raised social media companies during his questioning, saying that we have seen particularly abusive monopolies in the “Big Tech” sphere.

The Judiciary Committee was focused on issues related to social media in the last Congress, and the hearing made clear that they will continue to be a focus during this Congress.

3. Consumer protection was the dominant theme of the hearing. 

Other than quoting Taylor Swift lyrics, the most common refrain during the hearing was the impact of Ticketmaster’s market dominance on consumers, or constituents. The senators focused in particular on data security and pricing.  

During Senator Josh Hawley’s (R-MO) questioning, he pressed Berchtold on Etix, Ticketmaster’s electronic ticketing software, and its data collection practices. If a Ticketmaster user sells their ticket to someone without a Ticketmaster account, the buyer would have to provide their data to Ticketmaster in order to access the ticket. While Berchtold insisted that the buyer’s data would not be used for marketing purposes after the event, Senator Hawley pointed out a discrepancy between Berchtold’s assertion and the policy on Ticketmaster’s website. Senator Hawley expressed serious concern about Ticketmaster’s data protection and privacy practices. Senator Marsha Blackburn (R-TN) asked Berchtold to respond in writing to whether the company is sharing consumer data with its vendors.

Multiple senators highlighted the high fees that Ticketmaster charges, stating that the lack of competition in the market is leading to higher costs for consumers. Another witness from a Ticketmaster competitor, SeatGeek, testified that it is nearly impossible to get a foothold in the market because venues don’t want to anger Ticketmaster, or in some cases have been threatened by Ticketmaster. Senators on both sides of the aisle repeatedly stated that Ticketmaster’s monopoly was stunting growth in the industry and hurting consumers.

Senators will undoubtedly continue to pursue antitrust issues through the lens of consumer protection. Companies should be prepared to showcase the precise steps they are taking to protect consumers’ data and refute claims of consumer harm.

4. Senators have not coalesced around a solution.

While there was near unanimous consent that the issues presented by the Ticketmaster debacle require action, there was far from consensus about a solution. Democratic senators, including Senators. Amy Klobuchar (D-MN), Mazie Hirono (D-HI), and Blumenthal, raised the prospect of passing new legislation or strengthening existing authorities, asking the witnesses what they believed the best solution would be. Senator Klobuchar emphasized that current laws need to be amended to provide enforcers with more power and resources, noting enforcement agencies are going up against some of the biggest companies in the world. Kathleen Brandish, the witness representing the American Antitrust Institute, responded that case law has continually narrowed the window of culpable conduct for enforcers to pursue, so any legislation that widens that window would help restore competition in the marketplace.

Sen. Mike Lee (R-UT) suggested that the U.S. Department of Justice (DOJ) should take a more aggressive approach in antitrust cases, questioning the DOJ’s decision to enter into a consent decree with Live Nation and Ticketmaster following their merger rather than pursuing the case to prevent their merger. Senator Blumenthal also expressed concern about the efficacy of the consent decree with Live Nation and Ticketmaster, saying that if the DOJ concludes that Live Nation violated the consent decree, unwinding the merger should be “on the table.”

The major takeaway here is that while there is bipartisan interest in examining and investigating antitrust issues in the tech sector, and particularly social media companies, senators have still not determined what an appropriate or effective solution would be. We should expect more hearings with tech companies on this issue, but it’s unlikely to see agreement on legislative fixes anytime soon.

Responding to Congressional Inquiries

Responding to congressional inquiries requires different strategic considerations from typical white-collar litigation or lobbying, and knowledge of House and Senate rules and practices is important to avoiding critical missteps that could expose firms to undue legal or public relations crises. Please reach out to Wilson Sonsini attorneys Andy Dockham, Janet Kim, or Jessica Heller with any questions about congressional inquiries or how Wilson Sonsini can assist you in any matter.

[1] U.S. Senate, Committee on the Judiciary, That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment, January 24, 2023, https://www.judiciary.senate.gov/meetings/thats-the-ticket-promoting-competition-and-protecting-consumers-in-live-entertainment.