Ticketmaster fined $10 million for breaking into rival’s systems

Ticketmaster, a Live Nation subsidiary and a leading ticket distribution and sales company, was fined $10 million for illegally accessing the systems of competitor CrowdSurge using the credentials of one of its former employees.

"Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence," Acting U.S. Attorney DuCharme said in a press release.

Stephen Mead, CrowdSurge's employee prior to the company getting acquired by SongKick and before being hired by Live Nation in 2013, and Zeeshan Zaidi, Ticketmaster’s former head of artist services division who has previously pled guilty to related charges, are two of the TicketMaster employees involved in the scheme.

Inside info used to "choke off" competitor

Mead shared private CrowdSurge URLs for draft ticketing web pages used with TicketMaster executives in November 2013 after joining Live Nation despite signing an agreement not to disclose the company’s confidential information.

Ticketmaster executives emphasized that the goal of this operation was to "choke off [victim company]" by stealing back signature clients.

He said that Ticketmaster could "cut [victim company] off at the knees" after winning back presale ticketing business for a major artist and a client of CrowdSurge according to court documents.

Mead also provided Zaidi and other Ticketmaster executives with confidential financial documents retained during his employment at CrowdSurge at a May 2014 Artist Services Summit, in San Francisco. 

TicketMaster "maintained a spreadsheet listing every victim company ticketing web page that could be located, so that Ticketmaster could identify the victim company’s clients and attempt to dissuade them from selling tickets through the victim company."

The next year, in January 2015, Mead was promoted by Ticketmaster to Director of Client Relations and given a raise after being transferred to the Artist Services division.

"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," DuCharme added.

"Today’s 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."

Mead and Zaidi fired

Ticketmaster was charged by the United States District Court for the Eastern District of New York with:

• one count of conspiracy to commit offenses to violate provisions of the Computer Fraud and Abuse Act
• one substantive count of computer intrusion for commercial advantage or private financial gain
• one substantive count of computer intrusion in furtherance of fraud
• one count of conspiracy to commit wire fraud
• one substantive count of wire fraud

The company admitted that it is responsible for the actions of its employees under United States law.

Besides the $10 million criminal fine, Ticketmaster was also ordered to maintain compliance and ethics programs to prevent violations of the Computer Fraud and Abuse Act.

"Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light," a TicketMaster spokesperson said.

"Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved."