Ticketmaster must pay a hefty $10 million fine after several employees utilized unlawfully obtained passwords to hack a rival company’s computer systems - in attempts to “choke off” its business.
This co-conspirator illegally retained credentials from the rival firm, which he and other Ticketmaster executives then used to hack into the victim company’s systems. From there, they were able to monitor the company’s draft ticketing web pages, allowing them to find out which artists planned to use the rival company to sell tickets. They were also able to hack into and snoop on the company’s Artist Toolbox, a password-protected app that provides real-time data about ticket sales.
FBI Assistant Director-in-Charge Sweeney in a statement said, “When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke 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 place.”
According to court documents, the former senior employee (who as of now remains unnamed) of the victim company worked there between May 2010 to July 2012. In 2012, he signed a separation agreement with the victim company upon leaving, in which he agreed to maintain the confidentiality of that company’s sensitive data, before joining Live Nation in August 2013.
In 2013, this former employee shared with former Ticketmaster head of the Artist Services division Zeeshan Zaidi the URLs for draft ticketing web pages of the victim company, which were not public.
In 2015, the victim company filed a civil complaint against Live Nation and Ticketmaster alleging antitrust violations. That lawsuit was amended in 2017 to add allegations that Ticketmaster had accessed the company’s computer systems without authorization. In 2017, both the former employee and Zaidu were then terminated by Ticketmaster.
Last week’s fine against Ticketmaster resolves charges that the company “repeatedly accessed without authorization the competitor’s computer systems.” The fine is part of a deferred prosecution agreement that Ticketmaster entered with the U.S. Attorney’s Office for the Eastern District of New York to resolve a five-count criminal complaint filed today charging computer intrusion and fraud offenses. As part of the charges, on Oct. 18, 2019, Zaidi pled guilty in a related case to conspiring to commit computer intrusions and wire fraud based on his participation in this scheme.
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