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Merriweather Post Pavilion, Columbia, Md.
Merriweather Post Pavilion in 2009. (File)

4th Circuit rejects Merriweather’s antitrust suit against Live Nation

A federal judge’s ruling that Live Nation Entertainment Inc. is not a monopoly has been upheld by the 4th U.S. Circuit Court of Appeals.

Maryland-based It’s My Party Inc. and It’s My Amphitheatre Inc., the companies behind the 9:30 Club and Merriweather Post Pavilion, alleged in a 2009 lawsuit that multiple artists and bands were coerced to appear at Nissan Pavilion, the Live Nation-owned, outdoor concert venue in Northern Virginia now known as Jiffy Lube Live, or at least skip appearances at Merriweather while in the region.

But Senior U.S. District Judge J. Frederick Motz ruled last year that there was no evidence Live Nation had monopolized a market or pressured acts to perform at its venues.

On appeal, the 4th Circuit panel last week upheld Motz’s ruling, finding the demand for concerts is local and the concert promotion and venue market is highly localized despite I.M.P.’s argument that the business is a national one which can be managed from afar.

The “tying arrangement” alleged by I.M.P., where Live Nation compels artists who hire them for promotion to perform at Nissan and only gives access to other amphitheaters if the artist performs at Nissan, was not convincing, according to the unanimous three-judge panel.

“What causes these anticompetitive harms and distinguishes tying from ordinary market behavior is not the mere bundling of two products together but rather the coercion of the customer,” Judge J. Harvie Wilkinson III wrote.

Offering two products in a single package to enhance the appeal is not itself coercive, Wilkinson added, and I.M.P. presented no evidence of coercion except that artists promoted by Live Nation disproportionately perform at Nissan rather than Merriweather. But there may be many other reasons an artist could choose to work with Live Nation, from convenience to preference for Nissan over Merriweather, the judge wrote.

“We applaud the Fourth Circuit’s ruling and appreciate the panel’s judicious verdict which eradicates claims of anti-competitive conduct by asserting that the ‘purpose of antitrust law is to penalize anticompetitive practices, not competitive success,'” Live Nation said in a statement released Wednesday.

Representatives from I.M.P. declined to comment Wednesday.

Competitive tactics

Wilkinson wrote that I.M.P. made a sweeping attack on Live Nation’s size but did not provide further evidence of an antitrust infraction.

“Upon further inspection, what plaintiff characterizes as illegal conduct turns out to be lawful pro-competitive behavior,” he said. “To hold otherwise would have the most serious implications.”

Businesses can offer package sales of multiple goods and be consistent with the Sherman Antitrust Act, according to the opinion, but offering an “attractive package” would become indistinguishable from anticompetitive conduct as I.M.P. defined it. I.M.P.’s “expansive tying definition” could restrict otherwise constructive forms of integration.

Bundling products and services can save costs for the customer, as Live Nation does by offering promotion and a series of concern venues.

“Artists do not have to seek out and transact with separate sellers for each of the services offered by [Live Nation],” Wilkinson said. The ultimate harm if such practices were forbidden would be the consumer’s ability to freely contract for goods and services.

The appellate case is It’s My Party Inc. et al. v. Live Nation Inc., 15-1278.

Live Nation had previously been involved in multidistrict litigation over similar antitrust claims. Those 22 cases were settled and dismissed in June 2012, according to court records.