Ticketmaster fined $10million for hacking competitor

News

Ticketmaster has been fined $10million for hacking a competitor between 2013 and 2015, according to a formal report from the US Department of Justice [DOJ].  

Federal prosecutors brought five individual charges against the ticketing giant, including computer intrusion and wire fraud, claiming the company accessed “without authorization the computer systems of a competitor.” 

The incidents in question occurred after a new employee joined Ticketmaster subsiduary Live Nation in 2013 from Crowdsurge, the company that went on to merge with Songkick, a firm that itself filed a huge antitrust lawsuit against Live Nation in 2015 and sold “selected assets” unrelated to tickets to one of its major backers, Warner Music Group (WMG), in 2017.

Early 2018, Live Nation settled the antitrust case to the tune of $110million, with another undisclosed amount also paid to acquire Songkick ticketing assets that WMG had not purchased. 

This latest legal battle is based on allegations the former Crowdsurge employee, named outside the official report as Stephen Mead, delivered large numbers of documents and passwords to Ticketmaster’s former-head of artist services, Zeeshan Zaidi. This included draft web pages through which it was possible to identify clients, allowing Ticketmaster to then try and dissuade them from selling through its competitor. 

Ticketmaster has released an official statement concerning the case, Mead and Zaidi, both of who left the company in 2017: “Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.” 

According to the DOJ, the $10million delayed-prosecution deal requires Ticketmaster to “maintain a compliance and ethics program designed to prevent and detect violations of the Computer Fraud and Abuse Act and other applicable laws”. The company “will also report to the United States Attorney’s Office annually during the three-year term of the agreement regarding these compliance measures,” and its Live Nation subsidiary will “face prosecution for the five charges should it violate terms of the agreement.”

It’s the latest controversy to surround Ticketmaster, with past scandals including tickets being placed directly on resale sites and a $4.5million fine for using misleading prices.