Using The Government To Crush Competitors Harms Fans And The Economy

Cronyism and industrial policy are thriving to the detriment of our economic vibrancy. Consider that between 1960 and 2007 – right before the Great Recession – the economy expanded by more than 3% annually. Recessions happened, of course, but the economy always recovered the lost ground.

Things changed following the 2007-09 housing meltdown and resulting economic downturn. Since that time, real GDP growth has slowed to barely 2%. While there are several driving factors, the growth of cronyism is one of them.

Cronyism, as the Committee for Economic Development of the Conference Board defines it, entails

deals between some private interests (business, anti-business interests, professions, social groups) and government that “pick winners” and thereby also pick losers, on the basis of political influence rather than merit. Such deals would inhibit the productive reallocation of society’s resources and reduce innovation and economic growth.

Cronyists rarely present themselves in this manner, of course. Instead, the playbook is straightforward – identify a problem, then propose an overly restrictive governing scheme that couches the political favoritism as a beneficial expansion of the regulatory state. While the regulation’s higher costs will overburden smaller competitors and reduce economic growth, the new burdens will also enshrine the cronyists’ market power.

Unfortunately, there are many examples of this strategy. For instance, large electrical manufacturers supported increases in lighting efficiency standards, which effectively banned the traditional incandescent lightbulb. These same large manufacturers also happen to have a competitive advantage producing the newer technologies that have replaced the now politically obsolete incandescent bulb.

More broadly, pervasive cronyist actions are growing the regulatory state’s financial burden on small businesses relative to their larger competitors. According to the U.S. Chamber of Commerce,

Small businesses pay on average $11,700 per year per employee in regulatory costs, and the costs of regulation to smaller businesses with 50 employees or less are nearly 20% higher than they are for the average firm. The regulatory costs of federal economically significant rules to small businesses amount to over $40 billion per year.

Live Nation appears to be applying the same script in the live events market. Live Nation is the parent company of Ticketmaster, which controls roughly 70 to 80 percent of the U.S. ticket market. And a large problem exists in the live entertainment market – ticket scalpers are too often creating access barriers for fans.

Thanks to these barriers, fans wind up paying unnecessary costs. The excess costs on fans do not benefit the artists or the entertainment venue and, making matters worse, fans are getting less access to their preferred live performances. Beyond the additional burdens imposed on fans, artists’ visibility is reduced, which is especially problematic for many up-and-coming performers.

Addressing this problem is a high priority, consequently.

There are a growing number of strategies and technologies available to push back against the middlemen. These approaches block out the scalpers and ensure that fans have direct access to tickets. Many of these strategies directly benefit the market’s ultimate suppliers (e.g., the artist and the venue) and demanders (e.g., the fans), and they increase the competitive nature of the market. The increased competition will encourage continued product innovations in the future.

Eschewing these competitive solutions and consistent with the cronyist approach, Live Nation has asked Antitrust Czar Gail Slater, FTC Chairman Andrew Ferguson, and Treasury Secretary Scott Bessent to impose a 20% resale price cap to address the problem.

If implemented, the 20% cap will benefit Live Nation by thwarting competition and driving the resale market toward Ticketmaster’s marketplace. However, based on the outcomes that occurred in other countries that imposed price controls, these price caps will not address the access and cost issues fans are experiencing.

A 2025 study of the price caps imposed in Australia and Ireland found that ticket fraud rates were significantly higher in their capped markets. Ireland introduced resale restrictions in 2021, and by 2024, scams were surging so badly that law enforcement, major banks, and payment apps like Revolut were all sounding the alarm.

The administration should resist these rent-seeking appeals. Protecting open and competitive markets, not price controls, is the most efficient way to lower costs and expand access to live events.

Resisting this cronyism would show that Washington is serious about standing with consumers and competition, not entrenched interests. Applied broadly, this approach of empowering competition rather than cronyism will incentivize innovation and entrepreneurship and help restore our past economic vitality.