In March, one of the most important antitrust cases in recent memory went to trial. The Department of Justice and 39 states plus the District of Columbia had sued the ticketing-and-entertainment giant Live Nation, alleging that its 2010 merger with Ticketmaster had created an effective monopoly on live shows. According to the suit, Live Nation controls 70 percent of what the government defined as “major concert venues” in the United States, and Ticketmaster handles 86 percent of concert ticketing at those venues. The DOJ accused the company of exploiting this monopoly by compelling venues to use Ticketmaster as their exclusive seller, jacking up prices, and saddling concertgoers with unavoidable junk fees. This certainly looked like an archetypal case of a company’s size leaving consumers worse off—precisely what our antitrust laws are designed to prevent.
This is what made it so disappointing when, a week after the trial began, DOJ announced that it had reached a settlement with Live Nation. Although the agreement mandated changes to some of the company’s practices, including granting access to other booking agents at some venues and limiting fees, the deal fell well short of the more aggressive remedies that many people had hoped for, including—most obvious—breaking up the company.
This odd turn of events makes sense only because we know now that the decision to settle was made not by anyone in DOJ’s Antitrust Division but by the president himself, according to a recent report in The Wall Street Journal. Just before the trial was set to begin, Donald Trump met with the CEO of Live Nation in the White House a couple of times and allegedly told a senior DOJ official, “Settle it.” In other words, the federal government abandoned one of its strongest antitrust lawsuits in years because Trump wanted it to.
[Quinta Jurecic: DOJ enters a new, even more aggressive phase]
This may then seem like yet another story about how Trump has wrecked norms and corrupted the rule of law. But in this case, there’s a twist. After the Department of Justice announced in March that it was settling with Live Nation, many observers expected that the states involved would drop the suit and sign on to the deal, as typically occurs when federal regulators reach a settlement. But in this case, 32 states—including Republican-led Florida, Tennessee, Texas, and Utah—and D.C. refused to settle. In April, they won their case: A jury found that Live Nation had illegally monopolized the live-events business and overcharged consumers. The judge is still determining the remedy, but it will almost certainly be tougher than the deal Live Nation got from DOJ.
This will not be a one-off. A peculiarity of federal antitrust law is that state attorneys general can bring lawsuits on behalf of their citizens for violations of the Sherman Antitrust Act, and many states also have their own antitrust laws on the books. This gives them a great deal of leeway to act on their own. And because of the Trump administration’s attitude toward antitrust laws, what we saw in the Live Nation case—states refusing to defer to the feds, and instead pursuing litigation—will become more common.
This is because Trump, despite having campaigned as a populist who would fight to lower prices, has presided over an administration that’s been almost completely deferential to the interests of businesses looking to get bigger. Since his return to office, the Department of Justice has filed exactly one lawsuit to block a merger—the $14 billion acquisition of Juniper Networks by the Hewlett Packard Enterprise Company—only to quickly reach a settlement. Stanley Woodward, a top DOJ official who oversees antitrust enforcement, appears to be an active opponent of antitrust litigation. Bloomberg reports that he’s wondered aloud in meetings why DOJ can’t simply stop reviewing deals. That’s not exactly the guy you want in charge of preventing monopolies.
As the Live Nation case shows, even when a lawsuit does move forward, CEOs can simply go to Trump to get his support. After describing the settlement as “shocking” to lawmakers on Capitol Hill in May, Roger Alford, a Notre Dame law professor and former Antitrust Division senior official in Trump’s first term, observed that Trump’s interference in the case both undermined norms and set a new precedent for behind-the-scenes advocacy: “The rule of law quickly becomes the rule of lobbyists.”
[Read: Even when Ticketmaster works, it doesn’t]
Presidents historically avoided interfering directly with antitrust cases. The exceptions were few and notoriously corrupt (such as Richard Nixon’s meddling in an antitrust lawsuit against the International Telephone & Telegraph Corporation in exchange for a financial donation to the Republican National Convention). But Trump views the entire executive branch as an extension of his will, and he has turned regulatory agencies and DOJ into tools he can use to dole out favors, reward friends, and punish enemies. The only companies that have to worry about a federal antitrust prosecution at this point are those that Trump fiercely dislikes.
But as the Live Nation case demonstrates, any sighs of relief among leaders of America’s oversize businesses would be premature. In an ideal world, antitrust regulations wouldn’t be fragmented and enforced by a panoply of states. But when the president effectively turns national antitrust laws into dead letters, the virtues of federalism become apparent: States will do what DOJ fails to do. This arrangement also makes it harder for companies to simply lobby their way to good deals across multiple states.
The paradox is that by trying to hand out sweetheart arrangements to companies that are either trying to merge or flexing their monopoly power, Trump has made it more likely that those companies will have to navigate a gantlet of state lawsuits. And in asserting total control over the federal government, Trump has ended up making state governments much more aggressive and influential than they were before.
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