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Ticketmaster has agreed to pay a $ 10 million fine to solve criminal charges that he repeatedly had access to a competitor’s computer systems in an alleged plan to gather ‘business intelligence’. Ticketmaster, a subsidiary of Live Nation, mainly sells and distributes tickets for concerts and other events.
The fine is part of a deferred prosecution agreement filed in Brooklyn federal court on Wednesday, which contains five criminal pieces of information that Ticketmaster charges of conspiracy to commit computer hacking, computer intrusion for commercial gain, computer intrusion to promote fraud, wire fraud. conspiracy and wire fraud.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| LYV | LIVE NATION ENTERTAINMENT | 74.57 | +0.06 | + 0.08% |
Federal prosecutors said Wednesday that Ticketmaster executives and employees repeatedly used stolen passwords to illegally gain access to the computers of an unnamed competitor, in an attempt to “suffocate” his business and lure away large customers.
A source familiar with the matter told FOX Business that the competing company in question is Songkick, a company that specializes in pre-sale artists, where a percentage of tickets have been set aside before the general ticket sales in an effort to to reduce scalping. In addition, Songkick offered an Artist Toolbox, a password-protected app that provided real-time data on tickets sold by the company.
According to Reuters, Live Nation acquired Songkick’s technological assets and patent portfolio in 2018 as part of a $ 110 million settlement to resolve an antitrust lawsuit. The Wall Street Journal reported that Songkick merged with a company called Crowdsurge in 2015 before acquiring Live Nation.
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The source identified one of the employees involved in the alleged scheme as Stephen Mead, a former Crowdsurge employee who started working with Live Nation in 2013.
During Mead’s time with Ticketmaster, he shared URLs with Zeeshan Zaidi, the former head of Ticketmaster’s Artist Services division, and other employees in order to illegally design concept tickets designed by Crowdsurge. Mead explained to Ticketmaster executives that ‘IDs’ can be stored in the URLs so the company can find out which artists want to use the web pages to sell tickets.
In May 2014, during an Artist Services Summit, Mead demonstrated to Ticketmaster executives with login information he had kept from his time at Crowdsurge. Mead also provided Zaidi and other Ticketmaster executives with internal and confidential financial documents of the company.
Around January 2015, Ticketmaster Mead offered a pay raise and promoted him to director of customer relations. Mead helped Ticketmaster maintain a spreadsheet that listed every webpage that could be tracked, which would then be used to ‘deny’ artists to use Songkick’s services. Ticketmaster employees gained access to the password-protected Songkick Toolboxes through December 2015.
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A Ticketmaster spokesman told FOX Business that both Mead and Zaidi were terminated in 2017 after their behavior came to light.
“Their actions are contrary to our corporate policies and contrary to our values,” the spokesman added. “We are pleased that this matter has now been resolved.”
In a related case, Zaidi pleaded guilty to conspiracy to commit computer intrusion and wire fraud based on his participation in the same scheme. He has not yet been sentenced.
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In addition to paying the fine, Ticketmaster must also report to the U.S. Attorney’s Office annually during the three-year term of the agreement on new compliance measures, which include maintaining clear policies to detect and prevent unauthorized computer intrusion.
If Ticketmaster violates the agreement, the company will be prosecuted on charges of computer intrusion and fraud.