Ticketmaster agreed on Wednesday to pay a $10 million fine to escape prosecution over criminal charges accusing the company of hacking into the computer system of a startup rival.
A judge in federal court in New York City signed off on the deal in what’s been a long-running legal battle that challenged Ticketmaster’s dominance over ticket sales for concerts by major music acts. The Live Nation subsidiary had been facing multiple charges of conspiracy to commit hacking and wire fraud targeting a Brooklyn-based company called Songkick.
Ticketmaster had already paid $110 million in 2018 to settle a civil suit brought by Songkick.
Court papers accused Ticketmaster of trying to infiltrate systems created by Songkick for artists that had hired the startup to help sell up to 10% of seats for U.S. tours directly through their fan clubs. The arrangement was seen as a way to reward loyal fans while thwarting scalpers — and also something that could cut into profits for the empire.
Employees “repeatedly — and illegally — accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect potential business intelligence,” said Acting U.S. Attorney Seth DuCharme.
A statement from Ticketmaster on Wednesday said that the conduct involved only two employees who were fired in 2017.
“Their actions violated our corporate policies and were inconsistent with our values,” the statement said. “We are pleased that this matter is now resolved.”
Messages were left with Warner Music Group, the current owner of Songkick.
The scheme, hatched in 2014 by a former Songkick employee who joined Ticketmaster and a co-worker there, sought to hack into accounts so they could identify Songkick’s clients and dissuade them from doing business with the company, prosecutors said in court papers.
In internal communications, one of the employees boasted Ticketmaster could “cut (the victim company) off at the knees” if it could win back the pre-sale ticketing business for an unnamed major artist, the papers said.