Ticketmaster has agreed to cough up $10 million to avoid prosecution on charges that it repeatedly accessed a smaller rival’s computer systems in order to “choke off” the competition.
Ticketmaster will escape prosecution on a litany of federal raps — ranging from wire fraud to computer intrusion — for three years. It also agreed to implement controls to better protect against employee hacking, according to the deal finalized Wednesday before Brooklyn federal court Judge Margo Brodie.
Prosecutors said the alleged spying occurred between 2013 and 2015 when a Ticketmaster executive offered his boss access to his old company’s computer systems.
That employee, who sources say is Stephen Mead, joined Ticketmaster’s Artist’s Services division in Aug. 2013 after working for two years at UK-based startup Songkick, whose assets were later purchased by Ticketmaster’s parent company, Live Nation Entertainment.
The feds say that Mead, who could not be immediately reached for comment, shared his old Songkick passwords with his new boss at Ticketmaster, Zeeshan Zaidi, and others at the company.
“Screen grab the hell out of the system,” he allegedly told Zaidi and another exec in 2014.
Zaidi pleaded guilty in October 2019 and is awaiting sentencing on charges of conspiring to commit computer intrusions and wire fraud.
Songkick specialized in a process of pre-buying tickets and then setting aside a certain percentage for fans before general ticket sales begin, which was supposed to help reduce scalping.
Ticketmaster employees allegedly used Mead’s access to “choke off” Songkick’s business. They created, for example, a spreadsheet to track which artists Songkick was targeting so they could engage with them about staying at Ticketmaster, the feds said.
They also communicated with colleagues that they were aware they should not be accessing Songkick’s systems, prosecutors said.
“Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light,” a Ticketmaster spokesperson said in a statement. “Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.”
Songkick, which sued Ticketmaster in 2016 for an antitrust violation, was acquired by Warner Music Group in 2017 in a deal that included everything but the company’s ticket sales business.
Live Nation settled the suit for $110 million in 2018 and then acquired Songkick’s ticketing business for an undisclosed sum.
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