Ticketmaster agreed to pay a $10-million fine for hacking into British rival Songkick’s systems, stealing passwords, and unlawfully collecting business intelligence. As part of the agreement, the ticketing giant will also set up and maintain a compliance and ethics program and report annually to the U.S. Attorney’s Office for the next three years.
Ticketmaster has agreed to a $10 million settlement for criminal charges against its parent company Live Nation in 2017. The charges against the American ticketing giant alleged antitrust violationsOpens a new window wherein they accessed the computer systems of British startup Songkick, which had then mergedOpens a new window with CrowdSurge, to steal confidential information and manipulate operations.
Besides being slapped with a $10 million fine, the multi-year legal battle has also culminated in an agreement for a three-year deferment of criminal prosecution and resolution of five criminal counts â€“ conspiracy to commit computer intrusions, computer intrusion for commercial advantage, computer intrusion in furtherance of fraud, wire fraud conspiracy, and wire fraud.
â€œTicketmaster employees repeatedly â€“ and illegally â€“ accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,â€ statedOpens a new window Acting U.S. Attorney Seth DuCharmeOpens a new window in a press release by the U.S. Department of Justice. â€œFurther, Ticketmaster’s employees brazenly held a division-wide â€˜summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.â€
The password and information theft allegations against the ticketing giant first surfaced in 2017. According to the court documentOpens a new window released on December 30, 2020, Live Nation and subsidiary Ticketmaster employee Stephen Mead disclosed passwords of Songkick’s Artist Toolbox, a web-based app that provided the artist’s manager real-time data about ticket sales, to Zeeshan Zaidi, SVP/GM at Ticketmaster. Mead, who served as the Senior Vice President for Global Operations and General Manager, North America for Songkick between May 2010 and July 2012, joined Ticketmaster in August 2013.
There, Mead, along with Zeeshan ZaidiOpens a new window , who also led Ticketmaster’s Artist Services division, accessed Songkick systems several times between August 2013 and December 2015. The information obtained was used to prepare strategy presentations for senior Live Nation and Ticketmaster executives to square off against competitor products and services.
Moreover, the duo also got their hands on the URLs of web pages of presale tickets (usually a small share of the total tickets to be sold off the Ticketmaster platform) by artists to dissuade them from selling on rival platforms. Mead and Zaidi intended to take back the presale ticketing business with these anticompetitive practices by offering the same ticketing structure as their competitor.
In the process, they would â€œcut [Songkick] off at the knees.â€ Both Mead and Zaidi were terminatedOpens a new window from employment at Ticketmaster in October 2017.
Zaidi pleaded guilty to one count of conspiring to access protected computers without authorization and to commit wire fraud.
As part of the settlement agreement, Ticketmaster will create and maintain a compliance and ethics program and report annually to the U.S. Attorney’s Office for the next three years. Failure to do so would entail the resumption of criminal prosecution by the attorney’s office.
A Ticketmaster spokesperson told The VergeOpens a new window , â€œTicketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light. Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.â€