By Jonathan Stempel
NEW YORK (Reuters) – Ticketmaster LLC will pay a $10 million criminal fine to avoid prosecution on U.S. charges it repeatedly accessed the computer systems of a rival whose assets its parent Live Nation Entertainment Inc later purchased.
The fine is part of a three-year deferred prosecution agreement between Ticketmaster and the U.S. Department of Justice, which was disclosed at a Wednesday hearing before U.S. District Judge Margo Brodie in Brooklyn federal court.
Ticketmaster’s agreement resolves five criminal counts including wire fraud, conspiracy and computer intrusion.
It also requires the Beverly Hills, California-based company to maintain compliance and ethics procedures designed to detect and prevent computer-related theft.
Ticketmaster primarily sells and distributes tickets to concerts and other events.
Prosecutors said that from August 2013 to December 2015, Ticketmaster employees used stolen passwords to repeatedly access computers belonging to its rival to obtain confidential business information.
The rival, Songkick, specialized in artist presales, in which some tickets – often around 8% – are set aside for fans before general ticket sales begin, in part to foil scalpers.
Prosecutors said Ticketmaster was hoping to “choke off” the company and lure major clients away, and that one employee in the scheme was rewarded with a promotion and a raise.
Zeeshan Zaidi, a U.S.-Canadian citizen with degrees from Harvard Law School and Harvard Business school who once led Ticketmaster’s Artist Services division, pleaded guilty to a related charge in October 2019. He has yet to be sentenced.
Ticketmaster fired Zaidi and the other employee in October 2017. “Their actions violated our corporate policies and were inconsistent with our values,” it said in a statement on Wednesday. “We are pleased that this matter is now resolved.”
In January 2018, Live Nation reached a $110 million settlement with Songkick to resolve an antitrust lawsuit Songkick had filed, and agreed to buy Songkick’s remaining technology assets and patent portfolio.
(Reporting by Jonathan Stempel in New York; Additional reporting by Jody Godoy; Editing by Chris Reese, Chizu Nomiyama and Richard Chang)