Ticketmaster Pays $10 Million Criminal Fine for Intrusions into Competitor’s Computer Systems |

News Highlights: Ticketmaster Pays $10 Million Criminal Fine for Intrusions into Competitor’s Computer Systems |.

Earlier today, Ticketmaster LLC (Ticketmaster or the company) agreed in federal court in Brooklyn to pay a $ 10 million fine to resolve the charges it repeatedly accessed a competitor’s computer systems without permission. The fine is part of a deferred prosecution agreement that Ticketmaster has entered into with the United States Attorney’s Office for the Eastern District of New York to resolve a quintuple criminal information filed today for computer hacking and fraud. Earlier, on October 18, 2019, Zeeshan Zaidi, the former head of Ticketmaster’s Artist Services division, pleaded guilty in a related case to conspiracy to commit computer break-ins and wire fraud based on his participation in the same plan. Both cases have been assigned to US District Judge Margo K. Brodie.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Deputy Director of the New York Field Office of the Federal Bureau of Investigation, announced the announcement.

“Ticketmaster employees have repeatedly – and illegally – accessed a competitor’s computers without permission using stolen passwords to unlawfully collect company information,” said acting US Attorney DuCharme. Furthermore, Ticketmaster employees brutally held a division-wide ‘summit’ where the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic. Today’s resolution shows that any company that obtains a competitor’s confidential information for commercial advantage, without authority or consent, should expect to be held liable in federal court. “

“When employees leave one company and walk into another, it is illegal for them to take ownership information. Ticketmaster used stolen information to gain an advantage over the competition and then promoted the employees who break the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market, ”said Sweeney, deputy director of the FBI.

The scheme to “smother” the victim company

According to Ticketmaster’s confessions and publicly filed court documents, Ticketmaster, a wholly owned subsidiary of Live Nation Entertainment, Inc. (Live Nation), mainly deals with the sale and distribution of tickets for events and concerts. The victim company offered performers the opportunity to sell pre-sale tickets – sold prior to general ticket sales – on an online ticket platform. It also offered artists an Artist Toolbox (the Toolbox), a password-protected app that provided real-time data on tickets sold through the victim company.

An important part of the criminal plan was Coconspirator-1, a former senior employee of the victim company, who worked in the company’s offices in Brooklyn, New York from approximately May 2010 to July 2012. Around July 2012, Coconspirator-1 signed a divorce agreement with the victim company, agreeing to maintain the confidentiality of that company’s confidential information. He then joined Live Nation around August 2013.

In November 2013, while employed by Live Nation, Coconspirator-1 shared with Zaidi and another Ticketmaster employee the URLs for draft ticket web pages that the victim company had built for an artist, but not distributed to the public. In response to a Ticketmaster manager who explained that the goal was to “choke [victim company]And “steal one of back.” [victim company]’s signature customers,’ Coconspirator-1 offered that Ticketmaster ‘could cut [victim company] on their knees ”if they could reclaim presale tickets for a second major artist who was a customer of the victim company.

Ticketmaster’s break-ins into the victim’s password-protected artist toolboxes

In January 2014, Coconspirator-1 Zaidi and a second Ticketmaster manager emailed multiple sets of usernames and passwords for Toolboxes. Coconspirator-1 encouraged executives to “get the hell out of the system,” but also warned, “I must emphasize that as this is access to a live [victim company] tool I would be careful what you click on because that’s not the best [to] giveaway that we poke around. (Emphasis in original.) The information from the Toolboxes was then used to prepare a presentation for other senior executives designed to ‘compare’ Ticketmaster’s offers with those of the victim company.

In early May 2014, a senior executive from Live Nation (Corporate Officer-1) asked Zaidi and others how Ticketmaster’s online presale offer relates to the Toolbox. Coconspirator-1 was then asked to “do a screen share / demo” at an upcoming “Artist Services Summit”. Coconspirator-1 agreed to “compile a list of the log-ins and URLs I still have access to so that I can give the team as much insight as possible.” At least 14 Live Nation and Ticketmaster employees attended the Artist Services Summit in San Francisco. There, in front of those employees, Coconspirator-1 used a username and password he had remembered from his employment with the victim company to log in to a Toolbox and gave a demonstration. Coconspirator-1 later also provided Zaidi and other Ticketmaster executives with internal and confidential financial records he had retained from his employment with the victim company.

In January 2015, Coconspirator-1 was transferred to the Artist Services division, promoted to Director of Client Relations and received a raise. After the promotion, Coconspirator-1 emailed another Artist Services employee: “Now we can really start taking down [Victim Company]. Ticketmaster employees continued to have access to the victim company’s password-protected Toolboxes until December 2015.

Ticketmaster’s Surveillance of the Victim Company’s Draft Ticketing Web Pages

Between approximately July 2014 and June 2015, Coconspirator-1 and others checked draft ticketing web pages created by the victim company. Although these pages were not password protected, they were not indexed in search engines and therefore could not be found without determining the exact URLs, which contain a string of numbers. Until the victim company or artist publicly distributed a URL, the victim company wanted to restrict access to itself and the artist.

After Coconspirator-1 joined Live Nation, Coconspirator-1 explained to Zaidi and others how the “store ID” numbers in the URLs were numbered consecutively, allowing Ticketmaster employees to follow new pages and find out which artists were planning use the victim company to sell tickets. Coconspirator-1 used this information to search for new ticket sales webpages from the victim company and sent the URLs to Ticketmaster executives. In or around January 2015, a Ticketmaster employee was commissioned to learn more about this system from Coconspirator-1, and he kept a spreadsheet listing all of the victim company’s ticket sales web pages so Ticketmaster could access the victim company’s customers. identify and try to discourage them from selling tickets through the victim company. Zaidi explained that “we are not supposed to tip anyone where we have this understanding [the victim company’s] activities. ”

Agreement on deferred prosecution and criminal information

Under the terms of the deferred prosecution agreement, Ticketmaster will pay a criminal fine of $ 10 million and maintain a compliance and ethics program designed to prevent and detect violations of the Computer Fraud and Abuse Act and other applicable laws, and to unauthorized and unlawful acquisition of its competitors’ confidential information. Ticketmaster will also report annually to the United States Attorney’s Office for the three-year term of the agreement on these compliance measures. If the company violates the agreement, it will be prosecuted for the allegations in the criminal information filed today, accusing the company of one count of conspiracy to commit computer break-ins, one count of computer break-in for commercial benefit, one count of computer break-in for fraud promotion, one count of wire fraud conspiracy and one count of wire fraud.

The investigation is being conducted by the FBI’s New York Field Office. The government’s case is being handled by the Bureau’s National Security and Cybercrime Division. Assistant United States attorneys Allon Lifshitz, Craig R. Heeren and Ian C. Richardson are in charge of the prosecution.

The defendants:

TICKETMASTER LLC

EDNY Docket No. 20-CR-563 (SME)

ZEESHAN ZAIDIA Ge: 46 New York, New York

EDNY Docket No. 19-CR-450 (SME)

Via: www.justice.gov

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