Ticketmaster Fined $10 Million after Hacking

  • By Dawna M. Roberts
  • Published: Jan 04, 2021
  • Last Updated: Mar 18, 2022

Ticketmaster was fined $10 million after hacking into a rival company to steal information, proving not only do we have to worry about hackers but also legitimate companies who decide to dip their toes into nefarious cyber crimes. The fine is in lieu of formal charges and a conviction. 

What Happened

As reported by The Hacker News on January 2, Ticketmaster was cited by the court for hacking into a competitor’s computer systems between 2015-2017 to ”cut [the company] off at the knees.” The company in question is CrowdSurge. 

Ticketmaster is a subsidiary of Live Nation, and they stole information to seek an advantage over their competitor CrowdSurge. The competitor was acquired by Songkick in 2015 and later Warner Music Group in 2017. According to their lead counsel Seth DuCharme ”Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence.”

DuCharme elaborated, “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”

Engadget reported from the DOJ ”*In January 2014, Coconspirator-1 emailed Zaidi and a second Ticketmaster executive multiple sets of usernames and passwords for Toolboxes.  Coconspirator-1 encouraged the executives to “screen-grab the hell out of the system,” but also warned, “I must stress that as this is access to a live [victim company] tool I would be careful in what you click on as it would be best not [to] giveaway that we are snooping around.”  (Emphasis in original.)  The information from the Toolboxes was then used to prepare a presentation for other senior executives that was intended to “benchmark” Ticketmaster’s offerings against those of the victim company.*”

The Court Document Details

Court documentation showed that Stephen Mead, former General Manager at CrowdSurge, was hired by Live Nation in 2013 and then shared with Zeeshan Zaidi, Ticketmaster’s former head of Artist Services the private passwords to Artist Toolbox “an app that provided real-time data about tickets sold through the victim company.”

Mead also supplied Live Nation with financial documents stolen from CrowdSurge along with lists of artists who planned on using CrowdSurge to sell their tickets so they could talk them out of it and convince them to use Ticketmaster instead.

According to The Hacker News, “On October 18, 2019, Zaidi pled guilty in a related case to conspiring to commit computer intrusions and wire fraud for his participation in the scheme, stating, “we’re not supposed to tip anyone off that we have this view into [the victim company’s] activities.”

In the evidence collected, emails from top executives claimed that the goal was to “choke off” and “steal” big-name clients from CrowdSurge. The Hacker News commented that “Both Mead and Zaidi are no longer employed by Ticketmaster.” Ticketmaster assured the court that they were the only two employees involved in the incident, and since they have been terminated, the issue is now resolved. 

This latest fine comes after another lawsuit in 2018 brought by Songkick where Ticketmaster was forced to pay the owners a $110 million bounty.

Along with the court-ordered fine, Ticketmaster was ordered to create and comply with an ethics program “to detect and prevent such unauthorized acquisition of confidential information belonging to its rivals.”

The company will also be required to make an annual report to the U.S. Attorney’s Office over the next three years to ensure compliance.

What is Ticketmaster?

Ticketmaster Entertainment, Inc. is a ticket sales distribution company located in Beverly Hills, California. In 2010 the company merged with Live Nation Entertainment. The company caters to artists, venues, and promoters. Clients hire Ticketmaster to handle distribution of seat sales for concerts and live events. 

Computer programmer Peter Gadwa, along with Albert Leffler (box office specialists) Gordon Gunn III, Thomas Hart Jr., Dan Reeter, and Jerry Nelson, founded Ticketmaster in Arizona in 1976. Initially, the company sold software for ticketing systems; then, in 1982, they switched their business model to computerized ticketing. Their first big event was for Electric Light Orchestra (ELO), staged at the University of Mexico. 

Ticketmaster moved to Los Angeles in 1985. In 1993, Microsoft’s co-founder Paul Allen purchased 80% of the company for $325 million. From 1998 until 2009, Ticketmaster was purchased by Online City Search, and they acquired various other corporate entities growing larger.

Finally, in 2009 Live Nation bought Ticketmaster and formed Live Nation Entertainment. Since the merger, Ticketmaster has had its share of legal issues. It has also been highly criticized for its operating policies, deceptive pricing issues, a highly publicized data breach in 2018, and competitor computer hacking. 

The company is not without its issues, and the COVID-19 pandemic has put a large dent in ticket sales. Time will tell if this ticketing giant can pull out of its current tailspin. 

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