Ticketmaster pays a $ 10 million fine for repeatedly accessing one of its competitors' computer systems without authorization. The online ticketing company agreed to the fine after being charged by the US Attorney's Office for the Eastern District of New York with five cases of computer intrusion and fraud, the Justice Department said on Wednesday.
Ticketmaster employees used stolen passwords to gain access to Songkick's systems and "illegally collect business intelligence," said Seth DuCharme, acting US attorney for the Eastern District of New York. The tactic was also promoted at a Ticketmaster employee summit, the Justice Department said.
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The stolen passwords were obtained by a former Songkick employee in 2014, according to the Justice Department. The passwords were used to gain access to the company's "Artist Toolbox," which contained real-time information on pre-sale tickets sold for specific artists.
The former employee also provided Songkick's internal and confidential financial documents to Ticketmaster. He was then promoted and received a raise, the Justice Department said.
"Ticketmaster used stolen information to gain an advantage over the competition and then promoted employees who violated the law," said William Sweeney Jr., assistant director of the FBI's New York Field Office, in a statement.
Knowing the sequential system that Songkick used to number its URLs for these hidden web pages, the former employee also helped Ticketmaster keep a table with each artist that Songkick worked with in advance. Ticketmaster could then contact these artists and try to convince them to sell tickets through Ticketmaster instead of the Songkick, the Justice Department said.
In addition to the $ 10 million fine, Ticketmaster must also set up a compliance and ethics program to detect and prevent violations of the Computer Fraud and Abuse Act.
As part of the program, Zeeshan Zaidi, the former head of Ticketmaster's Artist Services department, pleaded guilty to conspiracy to commit computer interference and cable fraud in October 2019.
"Ticketmaster has terminated both Zaidi and Zaidi [Stephen] Mead [the Songkick ex-employee] In 2017, after their behavior came to light, "a Ticketmaster spokesman told CNET." Your actions violated our company guidelines and contradicted our values. We are pleased that this matter is now resolved. "
Sources with knowledge of the situation told CNET that no one knew about Zaidi - who was Mead's boss - from the practice.
The case was the subject of a civil settlement in January 2018 in which Ticketmaster's parent company, Live Nation, acquired the ticketing trading platform, anti-scalping algorithm, APIs and patents from Songkick.