The incident led to Ticketmaster becoming the target of immense vitriol from Swift’s fans and lawmakers, who raised allegations of antitrust violations and calls for curbs on the company’s dominance.
It also prompted the Senate Judiciary Committee to hold this week’s hearing on competition issues in the ticketing industry. In addition to Berchtold, witnesses include Jack Groetzinger, CEO of Ticketmaster rival SeatGeek; Jerry Mickelson, head of Jam Productions in Chicago; and musician Clyde Lawrence, who has spoken out against Ticketmaster.
Berchtold emphasizes in his comments that the hackers have not succeeded in obtaining tickets illegally.
“While the bots couldn’t penetrate our systems or obtain tickets, the attack forced us to slow down or even suspend our sales,” says Berchtold. In his testimony, Berchtold describes an “arms race” between companies like Ticketmaster and the scalpers and cybercriminals seeking illegal tickets for resale, and apologized to both Swift and fans for the consumer experience.
Berchtold will also say that the company could have taken other measures to improve sales: “In hindsight, there are several things we could have done better, including spreading sales over a longer period of time and doing a better job of meeting expectations. of the fans. get tickets.”
Two people familiar with the cyberattack, who were given anonymity to speak about the incident ahead of the hearing, said no perpetrator of the attack – which took several hours to address the company – has yet been identified. They said Ticketmaster reported the attempted attack to the Federal Trade Commission and the FBI, who are investigating the incident.
The FTC and FBI did not immediately respond to requests for comment.
Not only Ticketmaster had problems with Swift’s ticket sales. Five of the 52 concerts were sold by SeatGeek, which also had technical problems.
“Ticketmaster’s outage, recovery time and continued lack of a resolution are the result of monopoly complacency,” SeatGeek said in a statement. “Live Nation/Ticketmaster have eliminated competition in the space, particularly around Verified Fan, but also more broadly across their entire ticketing solution. No competition means no incentive to innovate and solve problems they have faced in the past.”
SeatGeek said its customers sometimes had “long waiting times and in some cases temporary credit card charges, which we’re not proud of, but a more modern technical architecture allowed us to make real-time changes to the user experience to keep fans buying tickets.”
The disclosure of the cyberattack is unlikely to ease the company’s antitrust heat.
“I expect Senator Lee to focus on antitrust policy during this hearing,” said Lee Lonsberry, a spokesman for Senator Lee. Mike Lee (R-Utah), the leading member of the Judiciary Committee’s antitrust subcommittee. Lonsberry said the Justice Department’s decision to authorize the 2010 merger between Live Nation and Ticketmaster will be a key topic of Tuesday’s hearing. As part of a settlement with the DOJ, the companies agreed not to discriminate against competitors. In late 2019, Ticketmaster agreed to extend the terms of the settlement until 2025 after the DOJ accused the company of violating the agreement.
Since the Swift tour troubles, Ticketmaster critics have used the issue as evidence of a company with no real competition and therefore little motivation to provide a quality service.
Berchtold will tell Congress that the ticketing industry has never been more competitive than it is today. “Ticketmaster has lost market share, not gained it, and every year competitive bidding results in ticketing companies getting less economic value in a ticket contract, while venues and teams get more.”
Berchtold will also urge Congress to revisit the 2016 BOTS Act to ensure that private companies like Ticketmaster can bring civil suits against individuals who resell tickets obtained by bots. He will also advocate for federal legislation that would require consumers to know the full price of their tickets from the beginning of the sales process.
“In this forum where we are here to discuss government policy, we must also recognize how industrial scalpers are breaking the law by using bots and cyberattacks to unfairly obtain tickets contribute to a terrible consumer experience,” Berchtold will testify.
Ticketmaster and its parent company Live Nation Entertainment are also facing an antitrust investigation from the Justice Department, but that precedes the Swift debacle. The companies face antitrust investigations dating back to Ticketmaster’s dispute with rock band Pearl Jam in the 1990s and a related DOJ antitrust investigation, as well as the 2010 merger between the two companies.