Ticketmaster has agreed to pay a $ 10 million fine after being accused of illegally accessing a competitor’s computer systems between 2013 and 2015 in an attempt to “cut” [the company] to the knees “.
A subsidiary of Live Nation, the California-based ticket distribution and sales company, used the stolen information to gain an advantage. CrowdSurge – which merged with Songkick in 2015 and was later acquired by Warner Music Group (WMG) in 2017 – by hiring a former employee to introduce their tools and learn about the firm’s operations.
“Ticketmaster employees repeatedly and illegally accessed the computers of an unauthorized competitor using stolen passwords to illegally collect business intelligence,” acting attorney Seth DuCharme said.
“In addition, Ticketmaster employees blatantly organized an ‘entire’ ‘summit’ in which stolen passwords were used to access the victim company’s computers, as if it were a proper business tactic.”
The allegations were first reported in 2017 after CrowdSurge sued Live Nation for antitrust violations, accusing Ticketmaster of accessing confidential business plans, contracts, customer lists and CrowdSurge tool credentials.
According to court documents released Dec. 30, after being hired by Live Nation in 2013, Stephen Mead, who was CrowdSurge’s U.S. chief operating officer, shared the passwords with Zeeshan Zaidi, the former head of the CrowdSurge. Ticketmaster artist services division, and another Ticketmaster employee. to Artist Toolbox, an application that provided real-time data about tickets sold through the victim company.
In addition to stealing passwords, Mead is also accused of providing “internal and confidential financial documents” withheld from his former employer, as well as URLs to scrape ticket sales websites to find out which artists planned to use CrowdSurge to sell tickets and ” deter them. ” to do so.
On October 18, 2019, Zaidi pleaded guilty in a case related to the conspiracy to commit computer intrusions and fraud for his participation in the scheme, and stated that “we are not supposed to inform anyone who has this opinion [the victim company’s] activities “.
An unnamed Ticketmaster executive said in an internal email that the goal was to “suffocate” and “steal” his customers with the recovery of the ticketing business for a second major artist who was CrowdSurge client.
Both Mead and Zaidi are no longer employed by Ticketmaster.
Ticketmaster previously resolved a lawsuit filed by Songkick in 2018 agreeing to pay the company’s owners $ 110 million and acquire the remaining intellectual property that was not sold to WMG for an undisclosed amount.
In addition to paying the $ 10 million penalty, Ticketmaster is expected to maintain an ethics and compliance program to detect and prevent this unauthorized acquisition of confidential information from its rivals.
The company will also have to make an annual report to the U.S. Attorney’s Office over the next three years to ensure compliance.