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Would breaking up Live Nation and Ticketmaster actually lower concert ticket prices?

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Would breaking up Live Nation and Ticketmaster actually lower concert ticket prices?

The U.S. Department of Justice’s effort to break up Live Nation and Ticketmaster has been a long time coming, following years of complaints from concertgoers who say they’ve been squeezed by exorbitant prices and hidden fees when trying to buy passes to see Taylor Swift, Beyoncé and other music megastars.

Ever since the government cleared the merger of concert promoter Live Nation and ticketseller Ticketmaster in 2010, there have been demands from consumer advocates to cleave them. The Justice Department argues that the combination is a monopoly that has resulted in harm for music fans and has clamped down competition in the multibillion-dollar live music market.

Live Nation says the arguments are off-base and will probably fail in court. Either way, it will take a long time for the case to wind through the legal system.

Why is the government suing Live Nation?

The Justice Department has raised concerns that Live Nation and Ticketmaster have retaliated against competitors and new entrants and locked out competition with exclusionary contracts.

“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services,” said Atty. Gen. Merrick B. Garland. “It is time to break up Live Nation-Ticketmaster.”

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Beverly Hills-based Live Nation, the world’s largest concert company, has long been a target for government scrutiny.

When the U.S. approved the 2010 merger, it did so after the companies agreed to a settlement meant to ensure fair competition in the ticketing marketplace and prohibit Live Nation from retaliating against venue owners that decided to defect to competitors. The consent decree was extended and amended in 2019.

But this time, the government is going hard at the company. In its Thursday lawsuit, the U.S. accused Live Nation of various anticompetitive practices and said the company uses its market dominance to impose fees on consumers and pressure artists to use its services.

The suit comes amid a wave of antitrust action from the Biden administration, which has sought to curb the power of conglomerates and Big Tech. The U.S. government has filed other cases against tech giants including Apple, Amazon and Google, taking them to task for their alleged impact on competition.

Live Nation said that the lawsuit will not solve issues related to ticket prices, service fees or access to in-demand shows.

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“Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin,” Live Nation said in a statement.

Would breaking up Live Nation lower prices?

Several industry observers who spoke to The Times expressed doubt that the lawsuit would significantly reduce prices for consumers.

Brandon Ross, an analyst at research firm LightShed Partners, said that artists decide how much they want to charge for a tour and then the promoter buys the tour from them. Due to Live Nation’s large scale, it is able to take a lower profit margin, with most of the money going back to the artist, Ross added.

“There is an efficiency in having a large player in the industry,” Ross said. “If that goes away, then that’s going to come out of either the artist’s take, or the artists are going to charge consumers even more.”

Artists like Swift and Bruce Springsteen are able to charge big sums for tickets because the concerts are one-time events, and some people are willing to pay. Because of supply and demand, tickets resold on the secondary market can be much higher than face value.

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But James Sammataro, co-chair of Pryor Cashman’s music group, said he believes the lawsuit could address issues such as excess ticketing fees.

“What’s really harming the consumer is all these excess fees and the restrictions on getting the tickets,” Sammataro said. “For most artists, these ‘increased prices’ aren’t really benefiting the artists. In many cases, it’s alienating their core ticket buyers and their core audience.”

There is a larger issue in the music industry of concert tickets being bought at face value by scalpers and resold on secondary markets for astronomical prices.

It’s leading to two classes of music fans: those who can afford to pony up and those who can’t.

Meanwhile, many promoters left the industry after getting clobbered by the pandemic, which shut down or restricted many live events. Some smaller music artists have also been hurt by the lack of competition among promoters and are not given opportunities to play at larger venues, Sammataro said.

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“The overall effect is that it leads to a very tilted playing field where it’s difficult for promoters to compete,” Sammataro said. “And when you have a lack of competition, essentially like the basis of predatory pricing, ultimately there’s going to be long term gouging.”

Could the company actually be broken up?

Anything is possible, but there is one thing everyone agrees on: This legal battle will be a long fight.

“Antitrust litigation can be long and protracted,” said Eric Enson, an antitrust partner at Crowell & Moring. “I expect that this will be a matter of years and not months.”

Music industry expert Bill Werde, who runs the music business program at Syracuse University, cautioned that splitting up such a large enterprise wouldn’t be easy, and it’s unclear what the businesses would look like after being disentangled from one another more than a decade after merging.

“They make their margin in ticketing and sponsorships, so if you break up this company, … I don’t know how Live Nation the concert promotion business necessarily lives and thrives independent of this high-margin ticketing business,” said Werde, who also publishes a weekly newsletter.

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But even if it could lose, there are reasons the government might be motivated to go after the company in an election year. As Werde and other experts were quick to point out, there’s nothing that unites people like hating Ticketmaster.

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After a pandemic strike, nurses union must pay Riverside hospital millions in damages

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After a pandemic strike, nurses union must pay Riverside hospital millions in damages

The union representing nurses at Riverside Community Hospital has been ordered to pay more than $6 million to the hospital for the fallout from a 2020 strike.

The unusual financial penalty was imposed by an arbitrator who found the 10-day work stoppage during the pandemic violated the terms of the labor agreement signed by HCA Healthcare, which operates the hospital, and Service Employees International Union Local 121RN. The $6.26-million fine, the arbitrator determined, was necessary to compensate the hospital for the cost of replacing workers who walked off the job during the strike, according to a statement released Wednesday.

Nurses walked off the job in June 2020 in an effort to force the hospital to increase staffing and improve safety as COVID-19 infections surged, the union said at the time. But hospital officials argued that because nurses also voiced complaints about shortages of personal protective equipment, the reasons for the strike were too expansive to be allowed under the collective bargaining agreement the two sides had signed.

“Our contract was clear, and the union showed reckless disregard for its members and the Riverside community by calling the strike,” said Jackie Van Blaricum, president of HCA Healthcare’s Far West Division, who was the hospital’s chief executive during the strike. “We applaud the arbitrator’s decision.”

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SEIU 121RN Executive Director Rosanna Mendez objected to the arbitrator’s findings, saying nurses were permitted under their contract to go on strike. She called the arbitrator’s decision “absurd and outrageous.”

“It is absolutely shocking that an arbitrator would expect nurses to not talk about safety issues,” Mendez said, adding that the union was exploring its options to contest the arbitrator’s decision.

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Supreme Court rejects California man's attempt to trademark Trump T-shirts

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Supreme Court rejects California man's attempt to trademark Trump T-shirts

The Supreme Court on Thursday turned down a California attorney’s bid to trademark the phrase “Trump Too Small” for his exclusive use on T-shirts.

The justices said trademark law forbids the use of a living person’s name, including former President Trump.

The vote was 9-0.

Trump was not a party to the case of Vidal vs. Elster, but in the past he objected when businesses and others tried to make use of his name.

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Concord, Calif., attorney Steve Elster said he was amused in 2016 when Republican presidential candidates exchanged comments about the size of Trump’s hands during a debate. Florida Sen. Marco Rubio, whom Trump had mocked as “Little Marco,” asked Trump to hold up his hands, which he did. “You know what they say about guys with small hands,” Rubio said.

After Trump won the election, Elster decided to sell T-shirts with the phrase “Trump Too Small,” which he said was meant to criticize Trump’s lack of accomplishments on civil rights, the environment and other issues.

Legally he was free to do so, but the U.S. Patent and Copyright Office denied his request to trademark the phrase for his exclusive use.

When he appealed the denial, he won a ruling from a federal appeals court which said his “Trump Too Small” slogan was political commentary protected by the 1st Amendment.

The Biden administration’s Solicitor Gen. Elizabeth Prelogar appealed and urged the Supreme Court to reject the trademark request.

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She acknowledged that Elster had a free-speech right to mock the former president, but argued he did not have the right to “assert property rights in another person’s name.”

“For more than 75 years, Congress has directed the U.S. Patent and Trademark Office to refuse the registration of trademarks that use the name of a particular living individual without his written consent,” she said.

Writing for the court, Justice Clarence Thomas said Thursday: “Elster contends that this prohibition violates his 1st Amendment right to free speech. We hold that it does not,”

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Elon Musk blasts Apple's OpenAI deal over alleged privacy issues. Does he have a point?

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Elon Musk blasts Apple's OpenAI deal over alleged privacy issues. Does he have a point?

When Apple holds its annual Worldwide Developers Conference, its software announcements typically elicit cheers and excitement from tech enthusiasts.

But there was one notable exception this year — Elon Musk.

The Tesla and SpaceX chief executive threatened to ban all Apple devices from his companies, alleging a new partnership between Apple and Microsoft-backed startup OpenAI could pose security risks. As part of its new operating system update, Apple said users who ask Siri a question could opt in for Siri to pull additional information from ChatGPT.

“Apple has no clue what’s actually going on once they hand your data over to OpenAI,” Musk wrote on X. “They’re selling you down the river.”

The partnership allows Siri to ask iPhone, Mac and iPad users if the digital assistant can surface answers from OpenAI’s ChatGPT to help address a question. The new feature, which will be available on certain Apple devices, is part of the company’s operating system update due later this year.

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“If Apple integrates OpenAI at the OS level, then Apple devices will be banned at my companies,” Musk wrote on X. “That is an unacceptable security violation.”

Representatives for Musk and Apple did not respond to a request for comment.

In a keynote presentation at its developers conference on Monday, Apple said ChatGPT would be free for iPhone, Mac and iPad users. Under the partnership, Apple device users would not need to set up a ChatGPT account to use it with Siri.

“Privacy protections are built in for users who access ChatGPT — their IP addresses are obscured, and OpenAI won’t store requests,” Apple said on its website. “ChatGPT’s data-use policies apply for users who choose to connect their account.”

Many of Apple’s AI models and features, which the company collectively calls “Apple Intelligence,” run on the device itself, but some inquiries will require information to be sent through the cloud. Apple said that data is not stored or made accessible to Apple and that independent experts can inspect the code that runs on the servers to verify this.

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Apple Intelligence will be available for certain models of Apple devices, such as the iPhone 15 Pro and iPhone 15 Pro Max and iPad and Mac with M1 and later.

So does Musk have a point? Technology and security experts who spoke to The Times offered mixed opinions.

Some pushed back on Musk’s assertion that Apple’s OpenAI deal poses security risks, citing a lack of evidence.

“Like a lot of things that Elon Musk says, it’s not based upon any kind of technical reality now, it’s really just based upon his political beliefs,” said Alex Stamos, chief trust officer at Mountain View, Calif.-based cybersecurity company SentinelOne. “There’s no real factual basis for what he said.”

Stamos, who is also a computer science lecturer at Stanford University and a former chief security officer at Facebook, said he was impressed with Apple’s data protection efforts, adding, “They’re promising a level of transparency that nobody’s really ever provided.

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“It’s hard to totally prove at this point, but what they’ve laid out is about the best you could do to provide this level of AI services running on people’s private data while protecting their privacy,” Stamos said.

“To do the things that people have become accustomed to from ChatGPT, you just can’t do that on phones yet,” Stamos added. “We’re years away from being able to run those kinds of models on something that fits in your pocket and doesn’t burn a hole in your jeans from the amount of power it burns.”

Musk has been critical of OpenAI. He sued the company in February for breach of contract and fiduciary duty, alleging it had shifted its focus from an agreement to develop artificial general intelligence “for the benefit of humanity, not for a for-profit company seeking to maximize shareholder profits.” On Tuesday, Musk, who was a co-founder of and investor in OpenAI, withdrew his lawsuit. Musk’s San Francisco company, xAI, is a competitor to OpenAI in the fast-growing field of artificial intelligence.

Musk has taken aim at Apple in the past, calling it a “Tesla graveyard,” because, according to him, Apple had hired people that Tesla had fired. “If you don’t make it at Tesla, you go work at Apple,” Musk said in an interview with German newspaper Handelsblatt in 2015. “I’m not kidding.”

Still, Rayid Ghani, a machine learning and public policy professor at Carnegie Mellon University, said that, at a high level, he thinks the concerns Musk raised about the OpenAI-Apple partnership should be raised.

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While Apple said that OpenAI is not storing Siri requests, “I don’t think we should just take that at face value,” Ghani said. “I think we need to ask for evidence of that. How does Apple ensure that processes are there in place? What is the recourse if it doesn’t happen? Who’s liable, Apple or OpenAI, and how do we deal with issues?”

Some industry observers also have raised questions about the option for Apple users who have a ChatGPT account to link it with their iPhone, and what information is collected by OpenAI in that case.

“We have to be careful with that one — linking your account on your mobile phone is a big deal,” said Pam Dixon, executive director of the World Privacy Forum. “I personally would not link until there is a lot more clarity about what happens to the data.”

OpenAI pointed to a statement on its website that says, “Users can also choose to connect their ChatGPT account, which means their data preferences will apply under ChatGPT’s policies.” The company declined further comment.

Under OpenAI’s privacy policy, the company says it collects personal information that is included in the input, file uploads or feedback when account holders use its service. ChatGPT has a way for users to opt out of having their inquiries used to train AI models.

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As the use of AI becomes more entwined with people’s lives, industry observers say that it will be crucial to provide transparency for customers and test the trustworthiness of the AI tools.

“We’re going to have to understand something about AI. It’s going to be a lot like plumbing. It’s going to be built into our devices and our lives everywhere,” Dixon said. “The AI is going to have to be trustworthy and we’re going to need to be able to test that trustworthiness.”

Night Archiving Supervisor Valerie Hood contributed to this report.

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