Ticketmaster agreed to pay a $ 10 million fine to resolve accusations of intrusion into one of its competitors’ computer systems, prosecutors said on Wednesday, ending a years-long legal battle over allegations that the company illegally interfered. in the business of a ticket company. called Songkick.
More than two years ago, Ticketmaster reached an agreement with Songkick in response to a lawsuit that accused the concert giant of abusing its market power to control ticket sales. In addition to closing a $ 110 million deal, Ticketmaster acquired some of Songkick’s remaining technology and patent assets for an undisclosed amount.
The legal battle also involved accusations of corporate espionage that led to an investigation by federal prosecutors in New York.
New York East District Prosecutors said in court documents that the computer intrusions were led by a former Songkick employee who left the start-up in 2012 and then started working for Ticketmaster, which is owned by Live Nation. The employee reportedly disclosed Songkick’s login information to other Ticketmaster employees so that they could access an application called the artist’s toolbox, which provided data on pre-sale ticket purchases through Songkick, the documents say.
The employee was also accused of sharing URLs that led to drafts of Songkick’s ticket sales pages. In response to that information, prosecutors said, a Ticketmaster executive wrote that the goal was to “stifle” its competitor and “steal back” one of Songkick’s main customers.
The details of the criminal investigation surfaced in a federal court in Brooklyn, where Ticketmaster formally agreed on Wednesday to pay the fine as part of a deferred prosecution settlement, according to a press release from the US attorney’s office. .
In a statement released on Wednesday, Ticketmaster said that in 2017 it fired the employee who provided the login information, as well as another Ticketmaster employee, Zeeshan Zaidi, who also accessed computer systems and faced separate charges.
“Their actions violated our corporate policies and were inconsistent with our values,” said the statement. “We are pleased that this matter is resolved.”
Last year, Zaidi, who was previously head of Ticketmaster’s artist services division, pleaded guilty to conspiring to commit computer intrusions and electronic fraud in connection with the case. Lawsuits from the US attorney’s office said Mr. Zaidi accessed Songkick’s computer systems on “countless occasions” between 2013 and 2015. Mr. Zaidi also included screenshots of the Songkick toolbox for artists in one presentation to executives and requested “confidential proprietary information” about Songkick from the employee who had worked there, the documents said.
A Zaidi lawyer, who is awaiting sentencing, did not immediately respond to a request for comment.
The criminal charges against Ticketmaster, filed on Wednesday, include a charge of computer intrusion for commercial gain and a charge of electronic fraud. To comply with the postponed criminal action agreement, Ticketmaster must maintain an ethics program designed to prevent similar infractions in the future.
The $ 10 million fine is not a huge sum for a multi-billion dollar company, but the pandemic has already put significant financial pressure on Live Nation, which had to cancel shows in droves and respond to a barrage of demands for reimbursement.