Couldn’t Get Tickets to the Taylor Swift Concert? A Retroactive Look at the Live Events and Ticketing Monopoly in the US

By: Justine Kim

With soaring anticipation for the first live tour in five years, 3.5 million “registered” Taylor Swift fans around the country attempted to purchase presale tickets for the Eras Tour on Tuesday, November 15, 2022, ultimately resulting in website crashes and the cancellation of the scheduled public sale for non-registered fans. Although 2.4 million tickets were sold on that Tuesday, the incident became the catalyst for reignited scrutiny against Ticketmaster by concertgoers and artists alike, with renewed accusations of the company “abusing its market power at the expense of consumers.” As is the case for 80% of the ticketing market in the U.S., the Eras Tour tickets were sold by Live Nation Entertainment Inc. (LNE) through Ticketmaster

In 2010, Ticketmaster completed a $2.5 billion, tax-free merger with Live Nation to form LNE. This merger has been criticized (since its announcement) for “locking” competitors out of the industry and leaving consumers out of options. Consumers, lawmakers, and artists have continuously sought antitrust investigations into LNE for allowing the merged company to be the predominant servicer of tickets and live events in the U.S. with no meaningful competition.

Questions regarding the creation of a potential monopoly have persisted since the announcement of the merger, with notable criticism from Bruce Springsteen about Ticketmaster’s alleged “scalping” practices to a 2015 antitrust lawsuit by Songkick, LNE’s competitor. According to the Songkick suit, LNE had “threatened” artists to not work with Songkick and “abus[ed] [LNE’s] power as a concert promoter to influence how musicians sell their tickets.” In 2018, the two parties reached a $110 million settlement, including “an additional undisclosed sum [for LNE] to acquire some of Songkick’s remaining technology assets and patents.”

Analysis

Modern antitrust law in the U.S. is governed by three key federal statutes. First, the Sherman Antitrust Act of 1890 represents the federal government’s “commitment to a free market economy” by “outlaw[ing] all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade” or “monopoliz[ing] any part of interstate commerce.” According to the U.S. Department of Justice (DOJ), there is an unlawful monopoly under the Sherman Act if “only one firm controls that market for a product or service” and this market control was obtained “by suppressing competition with anticompetitive conduct” and not by the superiority of its product or service. Under this Act, unlawful monopolies are usually “punished as criminal felonies,” and the DOJ is the only entity with the power to bring such criminal prosecutions.

Second, the Federal Trade Commission Act, signed into law in 1914, established the Federal Trade Commission (FTC) and empowered the Commission to “prevent unfair methods of competition,” among other duties. The FTC Act, however, does not impose civil or criminal penalties, and provisions of this Act may only be enforced by and through the FTC.

Third, the Clayton Antitrust Act of 1914 empowered the FTC, in addition to other pro-competition duties, to prevent and eliminate unlawful corporate mergers and acquisitions (M&A). This Act mandates all entities considering M&A activity to consult the DOJ’s Antitrust Division and the FTC with violations of this Act resulting only in civil penalties. 1976 amendments to the Clayton Act allow “private parties to sue for triple damages when they have been harmed by conduct that violates either the Sherman or Clayton Act.”

Under this statutory framework, a merger of two or more entities may trigger FTC or DOJ investigations if either agency believes that there has been or may be a violation of antitrust law. In such cases, either agency “may attempt to obtain voluntary compliance” for the investigation “by entering into a consent order” with the merging entities. While a consent order is not an admission of violating antitrust laws, the order represents the signing entities’ agreement “to stop the disputed practices outlined in an accompanying complaint or [to] take certain steps to resolve the anticompetitive aspects of [their] proposed merger.” The entities’ refusal to sign a consent agreement with the DOJ or the FTC or their noncompliance with a consent agreement may cause the agencies to seek injunctive relief in a federal court.

In the LNE merger, the DOJ required the merging companies to divest some of their assets in order to obtain approval for the proposed merger. Specifically, Ticketmaster was required to “license its primary ticketing software to a competitor” (Anschutz Entertainment Group, “the second-largest concert promoter and operator of major venues”) and sell off its Paciolan Inc. ticketing unit. Live Nation, the concert-and-venue-hosting counterpart, “agree[d] to be barred from retaliating against venue owners who use a competitive ticket service” for a period of ten years.

However, as the ten-year deadline of the non-retaliation provision of the DOJ—Live Nation agreement drew near, the two organizations agreed to amend and extend this provision in 2019, based on Live Nation’s repeated violations of the provision. The DOJ had found that Live Nation, in violation of the original merger agreement, “had used its control over the concert touring business to pressure music venues into signing contracts with its Ticketmaster subsidiary.” This agreement, which will expire in 2025, would clarify the restriction that Live Nation “is not allowed to threaten venues in any way and may not retaliate against venues that decide to use a system other than Ticketmaster.”

LNE’s anti-competitive behavior has directly impacted consumers and the industry. According to a 2018 article, Ticketmaster, through LNE, ticketed eighty of the top one-hundred arenas in the U.S. Between 2009 to 2019, the average ticket price for the top 100 tours worldwide increased by 55% with the average ticket for the highest-grossing tour in North America (The Rolling Stones) costing $226.61. Using its unmatched power in the live music industry, Ticketmaster introduced a “dynamic pricing” system in 2011, which allows ticket prices to be dependent on the level of demand for the event and seat location. Bruce Springsteen has been a vocal critic of Ticketmaster’s dynamic pricing, particularly after prices for his concert ticket rose to $5,500—before the tickets were resold by a third party.

Conclusion

The Taylor Swift ticket sales reignited attention on the power of LNE in the ticketing and live event industry. Following the Eras Tour presale, the New York Times reported that the DOJ had opened an antitrust investigation into LNE, regarding their alleged abuse of “power over the multibillion-dollar live music industry.” Congress is also stepping in. The Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights announced that it would hold a hearing for “the lack of competition in the ticketing industry.” Industry competitors, consumers, and lawmakers are once again calling for greater scrutiny on the alleged anticompetitive power LNE has amassed since the 2009 Live Nation and Ticketmaster merger.

3D Printing in Intellectual Property

By: Yixin Bao

Starting in the 1980s, 3D printing or additive manufacturing arose and began to develop. Although the standard limitations that exist in current Intellectual Property (“IP”) law can be applied to 3D printing, there are still gaps in the legal profession that the courts need to address.

What is 3D printing? 

3D printing produces 3-dimensional physical objects from digital templates through a variety of processes. This is normally done under computer control, with materials added together, such as plastic, metal, and others, typically layer by layer. As of 2020, after around 40 years of its initial development, 3D printing has become a more mature technique. 3D printers are now more affordable allowing the public to use 3D printing techniques in normal life. Consumers can easily find a low-cost 3D printer as cheap as a few hundred dollars. 

3D Printing and IP Law

Today, there are more prosecutions and litigation over the use of intellectual property protection measures in the context of 3D printing. For example, Patent and Litigation Trends for 3D Printing Technologies published on IPLytics Platform found that the patent applications related to 3D printing continue to rise in the passing years, from around 2,000 in 2007 to over 20,000 in 2019. The good news is that the standard limitations that exist in current IP law can also be applied to 3D printing. 

Patent protection, for example, plays a significant role. In the U.S., patents are a government-granted monopoly towards the inventor for a limited period of 20 years. As WIPO’s 2015 World Intellectual Property Report on Breakthrough Innovation and Economic Growth has shown, 3D printing companies are enforcing patents heavily. These include not only specialist 3D printing companies but also major manufacturing companies, such as GE and Siemens. One of the reasons why patent protection is an important strategy over 3D printing is that such protection covers a wide variety of objects, including printers, the components of such printers, the manufacturing processes, and the products. In addition, the industrial 3D printing sector does not solely rely on patent law in its protection strategy. Trade secrets, copyright, and trademark protections also play a role.

However, there are also questions that courts need to address when it comes to the 3D printing technique. Compared to the industrial sector where the protection is similar to the other manufacturing industries, 3D printing for non-commercial purposes seems to face several new challenges. One question raised by Elsa Malaty and Guilda Rostama published in World Intellectual Property Organization (“WIPO”) Magazine is who would own an object when it is conceived by one individual, digitally modeled by another, and printed by a third individual. 

Why does it matter?  

With the quality of 3D printing continuing to rise and the price continuing to drop, 3D printing is now more advanced and accessible, so it can be foreseen that 3D printing-related legal protections and disputes will only increase in the future. The challenges and opportunities will come after the earliest patents start to expire. The original owners would need to develop new patentable technologies to maintain those protections. The expiration will also present an opportunity for the Open Source Community.

IP law contributes enormously to national economies. Dozens of industries, including 3D printing, rely on the adequate enforcement of IP. On the other hand, consumers benefit from IP to ensure the quality of the products, such as 3D printers. This is especially important because the availability of low-cost, high-performance 3D printers has put the technology within reach of consumers. 

At the same time, IP-related issues are only one legal aspect that 3D printing raises. During the use and application of this technique, other aspects of law will undoubtedly be implicated and will need to be resolved eventually.

SMRs: A Critical Piece of Washington’s Energy Future

By: Nicholas Lipperd

The state of Washington has been an effective leader in the transition to clean energy production and must continue to lead boldly. In passing the Clean Energy Transformation Act, Washington pledged to become a carbon-free energy producer by 2045. While the State’s natural resources allow hydroelectric power to lead the charge, hydroelectric cannot achieve Washington’s goal alone. With electricity demands expected to grow between 30% and 90% by 2045, in addition to the statewide drought that has been hampering hydroelectric power over the last decade, other clean energy sectors must step up. Solar is the industry that garners the most attention, and wind certainly has a role to play, but neither can contribute a reliable and sufficient portion of electricity demands for the immediate future. In order for the State  to meet its energy goals while maintaining its status as an energy exporter rather than importer, Washington should expand its commitment to nuclear energy. 

In the simplest of terms, a nuclear plant is nothing more than a hot rock that makes steam. That steam turns enormous turbines that, in turn, create clean, carbon-free electricity. Washington’s only nuclear power plant, Columbia Generating Station, generates 1200 megawatts (“MW”), enough to independently power the city of Seattle. By comparison, a single wind turbine typically creates 2.75 MW and the solar panels on a home generate about 300 watts (0.0003 MW). Given technological advancements, well-designed safety systems, and carefully monitored training standards, nuclear reactor plants in the U.S. are exceptionally safe steam-producing rocks. Just as importantly, the nuclear industry — as a whole — is an exceptionally safe operating environment, with only 0.1 fatalities per trillion kilowatt-hours of production in the U.S., as compared to 10,000 fatalities in U.S. coal production (and 100,000 in global coal).

Despite the incredible power reactors safely produce, America’s nuclear industry has been slowly declining because of diminishing economic value. Why make an investment in an industry with so many permitting and safety requirements when coal or gas can be produced so cheaply? This short-sighted approach is one from which America is finally shifting. The recently passed Bipartisan Infrastructure Bill (“BIB”) and Inflation Reduction Act (“IRA”) have created opportunities and incentives for the nuclear industry that the state of Washington must seize so that it may continue to meet its energy goals and lead our country towards clean, sustainable energy production. The BIB and IRA allow states to resurrect the dying nuclear industry and capitalize on an energy source that is powerful, long-lasting, and carbon-free. The IRA, for example, invests $2 billion into energy research, functionally accelerating the permitting and production of Small Module Reactors (“SMRs”). The IRA also allocates a $25 per MW credit for any new carbon-free energy production and invests $700 million in uranium enrichment for production of more efficient reactors. The BIB allocates funding directed to the continued operation of existing reactors; $6 billion in credits incentivizes companies and states to extend the lifetime of their reactors. Nuclear power currently provides 52% of the nation’s 100% clean electricity, and these bills embrace the idea that nuclear energy is vital to achieve carbon-free energy independence.

Washington must capitalize on these bills and further integrate nuclear power into its plan for clean energy production. Nuclear energy currently accounts for just under 10% of Washington’s power production, while hydroelectric dominates at 66%. Hydroelectric will continue to dominate, but it is unable to meet consumer demand alone. Washington’s two largest hydroelectric plants are over 80 years old. Its largest, Grand Coulee, has produced 20% less energy in recent years due to drought. As climate change makes droughts more likely and thus hydroelectric less reliable, nuclear energy can operate as a counterbalance. During dry seasons, Columbia Generating Station operates at near 100% output continuously to make up for demand. When spring comes and hydroelectric surges, Columbia is able to reduce its output, allowing demand to be met while extending the plant’s lifetime. Nuclear energy is dependent on, to paraphrase the USPS, neither wind nor rain nor heat nor sun. 

Columbia Generating Station is licensed to operate through 2043. The station seems to already be taking advantage of BIB funding: it has plans to increase power output 15% by 2033 and will likely extend the lifetime of the reactor through 2063. That is a critical step in the right direction, but, simply put, it won’t be enough. Washington needs more reactors and more flexibility in their operation to support its hydroelectric generation and meet increasing demands. Should Washington enable new reactor plant construction to meet demands, and SMRs are the best bet.

SMRs, defined by the U.S. Department of Energy (“DOE”) as modular nuclear power plants of 300 MW or less, are the next generation of nuclear reactors. A module design allows SMRs to be almost built completely in a controlled factory setting and installed module by module, reducing construction and maintenance costs and offline time. The small size means less heat energy to manage, less radioactivity during operations, and less radioactive waste. It also means the design is safer than current operating plants despite needing fewer safety systems. Due to their size and design, SMRs are so safe that they can’t melt down, the sensationalized concern of traditional nuclear plants. The small size also allows plants to be strategically placed in regions where power production or supply has traditionally been a challenge.

NuScale’s 77 MW is the leading SMR design for DOE approval. NuScale’s design includes installment plans of four or twelve reactors, depending on the energy demand for the region in which it would be installed. The small size and modularity allow flexibility of site location, expanding options to low water flow regions. This flexibility allows SMRs like NuScale to be built throughout Washington such that they are placed to efficiently bring energy to traditionally hard to supply regions while staying protected from natural disasters. SMRs can adjust power levels much more quickly and efficiently than large plants such as Columbia. Thus, placing SMRs near existing hydroelectric plants will allow nuclear power to more efficiently complement the hydroelectric plant’s output based on water flow. 

Even before the IRA made SMRs increasingly economically viable, Washington’s Energy Facility Site Evaluation Council (“EFSEC”) was scouting potential sites for SMRs. Because the DOE permitting process is cumbersome, sites with either existing energy operations or prior energy permits would enable the quickest installations. EFSEC has identified six of the former and nine of the latter with adequate conditions for SMR installation. With the IRA providing a pathway for cheaper, more efficient uranium and credits for clean energy production, Washington should take advantage and commit SMRs to some of these sites. 

Decades of design improvements prevent the world from experiencing another Chernobyl. Tightly regulated training standards and supervision prevents America from seeing another Three-Mile Island. Careful site selection and the design of SMRs are the nail in the coffin of nuclear disaster fears. In fact, the SMR idea has been flawlessly executed in Washington already. The U.S. Navy has operated SMR-style reactors incident-free in the most dynamic of environments for seventy-five years, with as many as a dozen such reactors operating on ships stationed in the Puget Sound. 
Nuclear power is energy that can be created without any carbon emissions that’s production does not rely on weather patterns. It is safe and reliable, but just as importantly, it produces magnitudes more power than other forms of energy. Not only has nuclear power earned a spot in Washington’s energy future, it is an energy source that Washington must embrace in order to meet its energy goals.

Identity Theft in the New Information Age

By: HR Fitzmorris

The Supreme Court recently granted the petition for a writ of certiorari in Dubin v. United States, agreeing to review the Fifth Circuit’s decision to uphold the conviction of Dubin for aggravated identity theft under 18 U.S.C. 1028A(a)(1).

Though seemingly mundane when compared with the Court’s recent blockbuster docket, this case raises interesting questions about what it means to commit identity theft in today’s technological landscape, and how prosecutors are adapting antiquated statutes to a new technological reality.

David Durbin was charged with health care fraud after he improperly billed Medicaid for patient care provided at the youth health facility where he worked. He had inflated the price of service and falsified the date to fit within the one-year limit for reimbursement.  Even though the fraud only netted the shelter $92, federal prosecutors tacked on an aggravated identity theft charge which carries a mandatory 24-month prison sentence. The aggravated identity theft statute makes it a federal crime, “during and in relation to a” predicate felony, to knowingly transfer, possess, or “use[], without lawful authority, a means of identification of another person.” 18 U.S.C. § 1028A(a)(1). Prosecutors reasoned that because Durbin used the patient’s name on the fraudulent form—even though Durbin was not impersonating the patient nor making misrepresentations about his identity—he had violated § 1028A(a)(1).

The district court convicted Durbin, despite the seemingly draconian punishment.  On announcing the verdict, the district court judge stated that he “hope[d]” that the conviction would “get reversed.” However, the en banc U.S. Court of Appeals for the Fifth Circuit affirmed

Prior to 1998, identity theft crimes were charged under “false personation” statutes, which go back to the late 19th century. False personation is “the crime of falsely assuming the identity of another to gain a benefit or avoid an expense.” Concern over the increasing ease of obtaining others’ identifying information for nefarious purposes skyrocketed as thieves went digital. Congress passed the Identity Theft and Assumption Deterrence Act in 1998, during the fledgling years of the world wide web. In his statement on signing the bill, President Clinton noted that “[a]s we enter the Information Age, it is critical that our newest technologies support our oldest values.” In 2004, Congress added the Identity Theft Penalty Enhancement, which established penalties for “aggravated” identity theft. Aggravated identity theft was defined as using the identity of another person to commit felony crimes, including immigration violations, theft of another’s Social Security benefits, and acts of domestic terrorism. 

Cases such as Durbin’s are raising questions about the potential reach of these statutes. Broad statutory language offers flexibility in a sector that is known for its quick innovations and ever-changing nature, which can be advantageous to prosecutors looking to curb cybercrime.  But, as the dissenting Fifth Circuit judges noted, the majority’s reading necessarily implicates “not only [] most every commission of healthcare fraud, but would also sweep in tax preparers, immigration attorneys, and anyone else convicted of submitting any form on someone’s behalf that contains a misrepresentation unrelated to the person’s identity.” This creates the risk of criminal liability for those submitting prepared forms on behalf of clients that contain misrepresentations that may have come from the client directly or from a mistake.

Chief Judge Priscilla Owen supported the majority reading of the statute, stating that the statute does not say anything about identity theft, but rather imposes an enhancement for certain felonies on anyone who “knowingly … uses, without lawful authority, a means of identification of another person.”

How the Supreme Court answers the question of “whether simply reciting another person’s name in the course of committing Medicaid fraud constitutes aggravated identity theft, or whether that person’s name has to play a ‘key role in the fraudulent activity’” may affect how identity theft is prosecuted in the future.

“Mob” Mentality: The Push for Unionization of Anime Voice Actors

By: Nicholas Neathamer

Whether you’re just hearing about it or are already a raving fan, the popularity of anime continues to skyrocket. Anime is a style of Japanese film and television animation that has garnered worldwide fans for decades, but the emergence of streaming platforms and their willingness to embrace the medium has given rise to booming demand for anime content in recent years. The market size of the anime industry has steadily risen over time and is expected to generate revenue of over $47 billion by 2028. Despite the overwhelming success of the industry, one often overlooked factor of an anime’s popularity is its cast of voice actors, who bring animated characters to life through dialogue. Existing in further obscurity are the voice actors who “dub” shows and movies, providing voiceover work in various languages to attract viewers around the world. These ‘dubbing’ voice actors often provide services for streaming platforms such as Netflix, Hulu, and anime-exclusive platform Crunchyroll. One of Crunchyroll’s most popular shows is currently Mob Psycho 100, and the platform recently began airing the anime’s third and final season. 

Despite Mob Psycho 100’s popularity, one of the most incendiary issues in the anime world recently has been Crunchyroll’s recasting of the show’s English voice for the protagonist. Kyle McCarley, the original English dubbing voice actor for the titular Shigeo “Mob” Kageyama, was informed by Crunchyroll that he would not be returning as the English voice of Mob. According to McCarley, the fallout was due to the actor’s request that after this final season of Mob Psycho 100, Crunchyroll would meet with union representatives to negotiate a potential contract for future productions. McCarley is part of the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA), an American labor union representing actors, voiceover artists, journalists, singers, radio personalities, and other media professionals. Crunchyroll currently chooses to not work with any SAG-AFTRA contracts, and McCarley’s proposal for a future union contract was allegedly enough for the streaming platform to look for a new lead voice for Mob Psycho 100. 

It’s no mystery as to why a company like Crunchyroll wouldn’t want to work with unionized voice actors. Unions like SAG-AFTRA are often able to secure more favorable terms for union members through the use of collective bargaining and standard contracts, such as SAG-AFTRA’s Dubbing Agreement. Entering into union contracts would bind Crunchyroll to pay voice actors at scheduled minimum payment rates, contribute to pension and health plans, and follow additional rules set forth by the union. Unionized labor forces are also able to more effectively go on strike against employers to push for higher compensation or new terms to their contracts. In particular, SAG-AFTRA voice actors went on strike against large video game publishers in 2016, arguing for residuals, transparency in roles, higher safety precautions, and better safety assurances for actors while on set. Rather than submit itself to such terms and the increased possibility of a strike, Crunchyroll has eschewed even the possibility of utilizing SAG-AFTRA talent. Instead, Crunchyroll hired non-union Ernesto Jason Liebrecht to voice the character of Mob.  

Some fans of Mob Psycho 100 have wondered whether McCarley can seek legal recourse after the recasting, including whether McCarley may have copyright protections over his portrayal of Mob. However, this is almost certainly not the case. In Garcia v. Google, Inc., a case from 2015, the United States Court of Appeals for the Ninth Circuit examined whether an individual actor or actress may claim copyright in his or her performance in a motion picture. The court looked to the Copyright Act, which states that “[c]opyright protection subsists…in original works of authorship fixed in any tangible medium of expression…[including] motion pictures.” 17 U.S.C. § 102(a). The Act also states that such a fixation must be done “by or under the authority of the author.” 17 U.S.C. § 101. The court ultimately agreed with the Copyright Office, who explained that its “longstanding practices do not allow a copyright claim by an individual actor or actress in his or her performance contained within a motion picture” and that for copyright registration purposes, “a motion picture is a single integrated work” and an acting performance cannot be registered apart from the motion picture. Therefore, McCarley, also solely an actor, would not be able to claim copyright over his role.

Another question posed is whether Liebrecht’s portrayal of Mob violates McCarley’s rights under California’s statutory scheme or common law (as the company operates primarily out of that state), including whether Liebrecht is able to imitate McCarley’s voice for Mob. California Civil Code section 3344 provides that anyone who knowingly and without prior consent uses another’s voice or likeness in any manner, on or in products or goods, shall be liable for any damages sustained by those injured. However, this statute only explicitly covers the actual voice and not vocal sound-alikes. Meanwhile, under California’s common law, imitating another person’s voice can violate that person’s right of publicity, as seen in the decision of the United States Court of Appeals for the Ninth Circuit in Midler v. Ford Motor Co. In that case, the court alluded to protections against imitations of a performer’s voice. The court held that “when a distinctive voice of a professional singer is widely known and deliberately imitated in order to sell a product, the sellers have appropriated what is not theirs” and have therefore committed a tort under California law. That said, such a narrow holding is unlikely to be applied to a performer such as McCarley, whose voice is not nearly as “widely known.” There also remains the issue that many may claim Liebrecht’s performance, while similar, is not an imitation of McCarley’s portrayal of Mob. 

While McCarley likely has no options to pursue legal recourse against Crunchyroll in this situation, there remains a silver lining for those who wish to see their favorite English dub actors be able to unionize more effectively. In 2019, Netflix reached out to SAG-AFTRA to negotiate a direct union agreement, leading to a 2019 agreement that included a Netflix-specific Dubbing Agreement. And on August 31, 2022, SAG-AFTRA members voted to ratify the successor contract, the 2022 SAG-AFTRA Netflix Agreement. This has further solidified the relationship between the streaming platform and union for dubbing contracts going forward, and has bolstered voice actors who work on dubs to continue a push for unionization. Looking down the road, the goodwill acquired by Netflix and push towards increased unionization may lead to a lack of dubbing talent—and a need to change policies—at Crunchyroll.