The incident led Ticketmaster to become a target of immense vitriol from Swift’s fans and lawmakers, who leveled accusations of antitrust violations and called for curbs on the company’s dominance.
It also prompted the Senate Judiciary Committee to call 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, who heads up Chicago-based Jam Productions; and musician Clyde Lawrence, who has been outspoken against Ticketmaster.
Berchtold emphasizes in his remarks that the hackers did not manage to illegally obtain any tickets.
“While the bots failed to penetrate our systems or acquire any tickets, the attack required us to slow down and even pause our sales,” Berchtold will say. In his testimony Berchtold describes an “arms race” between companies like Ticketmaster and the scalpers and cyber criminals looking to illegally obtain tickets for resale, and apologized to Swift and fans alike for the consumer experience.
Berchtold will also say the company could have taken other measures to improve the sales as well: “In hindsight there are several things we could have done better — including staggering the sales over a longer period of time and doing a better job setting fan expectations for getting tickets.”
Two people familiar with the cyberattack, granted anonymity to speak about the incident ahead of the hearing, said that a culprit for the attack — which took several hours for the company to address — has not yet been identified. They said Ticketmaster reported the attempted attack to the Federal Trade Commission and to the FBI, which are looking into the incident.
The FTC and the FBI did not immediately respond to requests for comment.
Ticketmaster was not alone in having trouble with the Swift ticket sales. Five of the 52 concerts were sold by SeatGeek, which also experienced technical difficulties.
“Ticketmaster’s outage, recovery time, and continued lack of a solution are the results of a monopoly’s complacency,” SeatGeek said in a statement. “Live Nation/Ticketmaster have boxed out 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 iron out problems that they’ve experienced in the past.”
SeatGeek said its customers sometimes had “long wait times and in some instances, temporary credit card charges, which we’re not proud of, but owing to more modern technical architecture we were able to make changes to the user experience in real-time to allow fans to continue to buy tickets.”
The cyberattack disclosure is unlikely to take the antitrust heat off of the company.
“I anticipate Sen. Lee focusing on antitrust policy during this hearing,” said Lee Lonsberry, a spokesperson for Sen. Mike Lee (R-Utah), the ranking member of the Judiciary Committee’s antitrust subcommittee. Lonsberry said the Justice Department’s decision to allow the 2010 merger between Live Nation and Ticketmaster will be a key subject of the hearing Tuesday. 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 into 2025 after the DOJ accused the company of violating the agreement.
Since the issues with the Swift tour, Ticketmaster critics have used the issue as evidence of a company with no real competition, and, therefore, little motivation to offer a quality service.
Berchtold will tell Congress that the ticketing industry has never been as competitive as it is now. “Ticketmaster has lost, not gained, market share, and every year competitive bidding results in ticketing companies getting less of the economic value in a ticketing contract while venues and teams get more.”
Berchtold will also urge Congress to reexamine the 2016 BOTS Act to ensure it allows private companies like Ticketmaster to bring civil cases against individuals who are reselling tickets obtained by bots. He will also call for federal legislation mandating that consumers know the full prices of their tickets from the start of the sales process.
“In this forum where we are here to discuss public policy, we also need to recognize how industrial scalpers breaking the law using bots and cyberattacks to try to unfairly gain tickets contributes to an awful consumer experience,” Berchtold will testify.
Ticketmaster and its parent company Live Nation Entertainment are also facing an antitrust inquiry from the Justice Department, but that precedes the Swift debacle. The companies are facing antitrust scrutiny 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.