Songkick’s lawsuit suit against Ticketmaster has become a case of what did they know and how did they know it?
Songkick is alleging that an ex-employee accessed confidential company information while under the employ of Ticketmaster and shared it with the company’s top executives. Ticketmaster counters the information was widely available and that Songkick didn’t make any effort to keep it secret.
It’s an unusual turn for the case that started as an antitrust lawsuit, but has taken a detour into personal attacks and salacious declarations of disloyalty, deceit and now “hacking,” although that might not be the correct pejorative to describe the new allegations.
On Thursday, Songkick filed an explosive new counter-suit against Ticketmaster in its one-year-old lawsuit against the ticketing giant for alleged antitrust violations. In the amended civil complaint filed Wednesday in Federal Court, lawyers for Songkick allege that a former employee who had left to work for Ticketmaster shared confidential information with several executives at Ticketmaster and allegedly used credentials from Songkick artist’s accounts to log in and glean information on their competitors. That information was allegedly used to help Ticketmaster build a fan club ticketing system to compete with Songkick and pursue potential artist clients in Songkick’s sales pipeline.
The allegations are the latest in a headline-driven approach for Songkick, which has shifted its legal argument from accusing Ticketmaster of being a monopoly to attacking its business practices and its own defense of the case. So far that strategy hasn’t paid off — in November a judge dismissed Songkick’s allegations that Ticketmaster had “destroyed evidence.” Months earlier, it lost a similar courtroom attempt to enforce a preliminary injunction against Ticketmaster.
The latest brouhaha comes after Songkick officials said Stephen Mead, Director of Client Relations/Artist Services at Ticketmaster and former VP at Songkick (when it was still called CrowdSurge), “accessed CrowdSurge’s protected computers and improperly acquired and used CrowdSurge’s trade secrets and confidential information,” and “used this information in order to revamp its unsuccessful Artist Services division into a clone of CrowdSurge, called Ticketmaster OnTour.”
Is that hacking? Not exactly — Songkick never accused Mead of breaking into their system or defeating their security protocols. What they are saying is that Mead retained certain company documents when he left in Songkick in 2012. He also had logins for at least three artist accounts he had created and continued to log in and monitor those accounts after he left. The information Ticketmaster allegedly obtained from Mead included “ticket sales, merchandise revenues, quarterly profitability, and forecasts of various kinds; cost and pricing data; customer information; and other non-public information of economic value.” The allegations come as part of the discovery phase of the case after a number of Mead’s emails had been turned over to Songkick.
Officials with Live Nation released a lengthy statement shortly after the revised complaint was filed, calling the case a “baseless antitrust lawsuit” that “has gone poorly for Songkick” after a preliminary injunction was tossed and a large part of Songkick’s case was dismissed. They also argue that many of Live Nation’s music managers have used Songkick in the past and have access to artist’s accounts.
“In the face of those adverse rulings, Songkick has been forced to conjure up a new set of dubious arguments,” Live Nation’s statement reads. “Songkick’s amended complaint is based on the alleged misappropriation of information that Songkick did not even try to keep secret, in some cases could not have kept secret, and in some cases shared with artist managers that work for Live Nation (emphasis added). The claims have no legal merit and Live Nation and Ticketmaster will continue to vigorously defend this case.”
According to the lawsuit, Mead was motivated to “bring down the hammer on CrowdSurge” and “’cut [CrowdSurge] off at the knees using’ whatever means necessary.” Last April Mead said he left Songkick on bad terms after “’COO Adam Schiffer informed me that CrowdSurge was ‘cutting my salary,’ and replacing him with less expensive, ‘straight-out-of-college’ hires.”
Not only did Mead allegedly have 85,000 company documents on his computer that he shared with Ticketmaster, he is alleged to have frequently shared it with Ticketmaster’s Zeeshan Zaidi, VP and GM for Ticketmaster OnTour. That data was often incorporated into company reports and presentation decks, often comparing Songkick and OnTour in benchmarking reports. In one email Mead allegedly encouraged his boss to “feel free to screen-grab the hell out of [CrowdSurge’s] system.”
Those screen shots then worked their way into presentations viewed by Live Nation’s Michael Rapino and Ticketmaster’s Jared Smith. Some of the documents that Mead obtained and provided to staff did sound sensitive in nature including “a whole bunch of [CrowdSurge’s] Weekly Heads of Department reports that included the projections vs real sales across tickets and merch[andise] in all territories that [CrowdSurge] operated in.”
Ticketmaster has 30 days to respond to the amended complaint and lawyers for the company are optimistic the judge will rule in their favor.
“The case has gone poorly for Songkick. It sought a preliminary injunction and lost, with the Court concluding that Songkick’s complaint ‘failed to show virtually any likelihood of success on the merits,’” Ticketmaster officials wrote in a statement. “And the Court granted in full Defendants’ motion to dismiss a significant swath of Songkick’s antitrust claims concluding that ‘there is no plausible argument’ supporting the baseless position Songkick adopted.”