Ticketmaster has agreed to pay a $ 10 million fine to resolve charges he has entered into the computer system of one of his competitors, prosecutors said Wednesday. on called Songkick.
More than two years ago, Ticketmaster reached a settlement with Songkick in response to a lawsuit accusing the concert giant of abusing its market power to control ticket sales. In addition to the amount of $ 110 million, Ticketmaster acquired Songkick’s remaining technological assets and patents for an unknown amount.
The court battle also involved allegations of corporate espionage that led to an investigation by federal prosecutors in New York.
Prosecutors from the U.S. Attorney’s Office in New York’s Eastern District said in court documents that the computer burglary was led by a former Songkick employee, who left the company in 2012 and later started working for Live Nation – owned Ticketmaster . The employee is said to have distributed Songkick’s login information to other Ticketmaster employees so that they could access an app called an artist box, which provided information on the purchase of presale tickets by Songkick, the documents read.
The employee is also accused of sharing URLs that led to drafts of Songkick’s ticket web pages. In response to this information, prosecutors said, a Ticketmaster manager wrote that the goal was to “suffocate” their rival and “steal” one of Songkick’s key customers.
The details of the criminal investigation came to light in a federal court in Brooklyn, where Ticketmaster on Wednesday formally agreed to pay the fine as part of a deferred prosecution agreement, according to a news release from the U.S. Attorney’s Office.
In a statement Wednesday, Ticketmaster said it had terminated in 2017 the employee who provided the login information, as well as another Ticketmaster employee, Zeeshan Zaidi, who also had access to the computer systems and faces separate charges.
“Their actions are contrary to our corporate policies and are contrary to our values,” the statement said. “We are pleased that this matter has now been resolved.”
Last year, Mr. Zaidi, formerly head of Ticketmaster’s artist services division, pleaded guilty to conspiracy to commit computer hacking and wire fraud. In the court documents of the American law firm it was said that Mr. Zaidi had access to Songkick’s computer systems on several occasions between 2013 and 2015. Songkick of the employee who worked there reads the documents.
An attorney for Mr. Zaidi, who is awaiting sentencing, did not immediately respond to a request for comment.
The criminal charges against Ticketmaster, which were filed on Wednesday, include one computer intrusion for commercial benefit and one time wire fraud. To comply with the deferred prosecution agreement, Ticketmaster must maintain an ethical program designed to prevent similar offenses in the future.
The $ 10 million fine is not a huge amount for a company worth more than a million dollars, but the pandemic has already put significant financial pressure on Live Nation, which has had to cancel concerts en masse and respond to a flood of claims for refunds.