The Department of Justice on Dec. 30 announced Ticketmaster agreed to a $10 million criminal fine as part of a deferred prosecution agreement (DPA) to resolve charges that it repeatedly accessed the computer systems of a competitor without authorization to illegally gather business intelligence.
The U.K. victim company, which was not identified by name, offered artists the ability to sell presale tickets—in advance of general ticket sales—on an online ticketing platform.
The details: Around July 2012, a former senior executive at the unnamed victim company signed a separation agreement, in which he agreed to maintain the confidentiality of the company’s information. He ultimately broke this agreement when he joined Live Nation—Ticketmaster’s parent company—approximately one year later.
With stolen passwords in hand, the former senior executive passed the information along to Ticketmaster employees and agents who then “accessed victim company computer systems without authorization from Live Nation and Ticketmaster computer systems on numerous occasions between August 2013 and December 2015,” according to court documents. “The information obtained from such unauthorized access was used for, among other things, preparing strategy presentations for senior Live Nation and Ticketmaster executives that benchmarked competitor products and services, including those offered by the victim company.”
The victim company merged with another company in or about 2015 and declared bankruptcy in 2016, the DOJ noted.
Remedial measures: Ticketmaster has agreed to “maintain a compliance and ethics program designed to prevent and detect violations of the [Computer Fraud and Abuse Act] and other applicable laws, and to prevent the unauthorized and unlawful acquisition of confidential information belonging to its competitors,” the DPA stated. Ticketmaster must also report to the U.S. Attorney’s Office annually during the three-year term of the DPA regarding these compliance measures.
The DOJ deemed that appointment of an independent compliance monitor was unnecessary.
Compliance lesson: Acting U.S. Attorney Seth DuCharme warned the Ticketmaster resolution “demonstrates that any company that obtains a competitor’s confidential information for commercial advantage, without authority or permission, should expect to be held accountable in federal court.”
The individual supplying the confidential information was terminated by Live Nation in October 2017, though he was promoted by the company at one point during the scheme.
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