Ticketmaster Pays $10m Criminal Fine for Hacking Rival – DoJ states that the company illegally accessed its competitor’s computer systems to ‘choke off’ the victim’s business.
The US Department of Justice has found Ticketmaster guilty of unlawfully accessing a competitor’s computer systems. Hence, the company was ordered to pay a $10m in criminal fine.
DoJ Declares Ticketmaster Guilty of Intrusion
According to the DoJ, Ticketmaster used passwords, which its rival firm’s former employee had retained, and accessed its computers. The department stated that it was a planned scheme to ‘choke off the victim’s business.’
Ticketmaster employees’ actions were condemned by the acting US lawyer for New York’s eastern district, Seth D DuCharme, and the FBI’s New York Field Office assistance director, William F Sweeney Jr.
Ticketmaster Admits Spying on Competitor
The US-based ticket selling and distribution firm admitted that it deliberately and knowingly accessed its key competitor’s computer systems to keep a check on its pricing and introduce competitive packages. The competitor was identified as a UK-based company with offices in New York and Brooklyn. Court documents revealed that the competitor was Songkick.
The company’s spokesperson stated that Ticketmaster executives used the old log-in credentials, which their former employee provided, and repeatedly accessed the systems. Songkick shut down its ticket-selling operations in 2017 and sold all other operations to Warner Music Group.
Ticketmaster’s Official Statement
After the court’s ruling, Ticketmaster released a statement that read: “We are pleased that this matter is now resolved.”
The company further revealed that the misconduct took place in 2017, and it involved two employees, namely Zaidi and Mead. Both of them were terminated in the same year after their misconduct was discovered since their actions breached their policies and values.
According to Acting U.S. Attorney DuCharme,
“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” stated DuCharme.
“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.”
The company added that they were happy to pay the fine because it will set a precedence that any company that attempts to hurt its competitor’s business using confidential information without permission will be held accountable in federal court.
Three-year deferred prosecution agreement
According to the DoJ, Ticketmaster’s ex-head of artists’ services pleaded guilty in October in a related case. The accused was charged with conspiring to commit computer intrusion and wire fraud and participated 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 the stolen information to gain an advantage over its competition, and then promoted the employees who broke the law,” Mr. Sweeney said.
The DoJ claims that the fine is part of a “deferred prosecution agreement” to resolve the case, which involved five counts of fraud offenses, including computer intrusion.
The agreement means Ticketmaster will maintain a compliance and ethics program, in addition to paying the fine, to timely detect and prevent breaching of the applicable laws, particularly the Computer Fraud and Abuse Act (CFAA).
The company will annually report to the US Attorney’s Office for three years, as per the agreement. If it violates this term, it will be subject to prosecution for the same criminal information charges filed against Ticketmaster.