Ticketmaster has paid a $10m (£7.3m) criminal fine for “intrusions into a competitor’s computer systems”, the US Department of Justice has confirmed.
The DoJ said the US ticket sales and distribution company had used passwords unlawfully retained by a former employee of a competitor to access computer systems.
It did this in a “scheme to ‘choke off’ the victim’s business”.
Ticketmaster said: “We are pleased that this matter is now resolved.”
It added in a statement that the misconduct had taken place in 2017 and involved two employees, both of whom had been sacked.
“Their actions violated our corporate policies and were inconsistent with our values,” the company said.
Bloomberg news agency said the competitor was identified “only as a UK company with an office in Brooklyn, New York, but details in the court documents indicate it was Songkick”, which is a ticket-selling company.
The actions of the Ticketmaster employees in the case were condemned by Seth D DuCharme, acting US lawyer for New York’s eastern district, and William F Sweeney Jr, assistant director of the Federal Bureau of Investigation’s New York Field Office.
They said the employees “repeatedly – and illegally – accessed a competitor’s computers without authorisation using stolen passwords to unlawfully collect business intelligence”.
“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,” they added.
They said the fine demonstrated that any company obtaining “a competitor’s confidential information for commercial advantage, without authority or permission, should expect to be held accountable in federal court”.
The US justice department said the fine was part of a “deferred prosecution agreement” to resolve a case with five counts of “computer intrusion and fraud offences”.
Three-year prosecution agreement
It said that on 18 October, Ticketmaster’s former head of artist services pleaded guilty in a “related case to conspiring to commit computer intrusions and wire fraud, based on his participation in the same scheme”.
Mr Sweeney added: “When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law.”
The deferred prosecution agreement means Ticketmaster has to pay the fine and then “maintain a compliance and ethics programme” designed to prevent and detect violations of the Computer Fraud and Abuse Act and other applicable laws.
Ticketmaster also has to report annually to the US Attorney’s Office during the three-year term of the agreement regarding these compliance measures.
If it breaches the agreement, it will be “subject to prosecution for the charges in the criminal information that was filed” in the current case.