Ticketmaster agreed to pay a $ 10 million fine after being accused of illegally accessing a competitor’s computer systems repeatedly between 2013 and 2015 in an attempt to “hack [the company] on your knees. “
A subsidiary of Live Nation, the California-based ticket sales and distribution company, used the stolen information to gain an advantage over CrowdSurge – which merged with Songkick in 2015 and subsequently acquired by Warner Music Group (WMG) in 2017 – hiring a former employee to break into his tools and obtain information about the company’s operations.
“Ticketmaster employees have repeatedly – and illegally – accessed an unauthorized competitor’s computers using stolen passwords to collect business information illegally,” said Acting Attorney General Seth DuCharme.
“In addition, Ticketmaster employees brazenly held a ‘dome’ across the division, in which stolen passwords were used to access the victim company’s computers, as if this were an appropriate business tactic.”
The allegations were first reported in 2017, after CrowdSurge sued Live Nation for antitrust violations, accusing Ticketmaster of accessing CrowdSurge’s confidential business plans, contracts, customer lists and tool credentials.
According to court documents released on December 30, after being hired by Live Nation in 2013, Stephen Mead, who was the general manager of operations for CrowdSurge in the United States, shared with Zeeshan Zaidi, the former head of the services division. Ticketmaster artists and another Ticketmaster employee, passwords to Artist Toolbox, an application that provided real-time data on tickets sold by the victim company.
In addition to password theft, Mead is also accused of providing “internal and confidential financial documents” withheld from his former employer, as well as URLs for ticket project web pages, to find out which artists planned to use CrowdSurge to sell tickets and “dissuade them” from doing that.
On October 18, 2019, Zaidi pleaded guilty in a case related to conspiring to commit computer intrusions and electronic fraud for his participation in the scheme, stating: “We must not alert anyone that we have this vision [the victim company’s] Activities. “
An unnamed Ticketmaster executive said in an internal e-mail that the goal was to “smother” and “steal” his subscription customers, regaining the ticket pre-sale business for a second major artist who was a CrowdSurge customer.
Both Mead and Zaidi are no longer employed by Ticketmaster.
Ticketmaster had already settled a lawsuit filed by Songkick in 2018, agreeing to pay the company’s owners $ 110 million and acquire its remaining unsold intellectual property from WMG for an undisclosed amount.
In addition to paying $ 10 million in penalties, Ticketmaster must maintain a compliance and ethics program to detect and prevent this unauthorized acquisition of confidential information belonging to its rivals.
The company is also expected to submit an annual report to the United States Attorney’s Office over the next three years to ensure compliance.