It's My Party, Inc. v. Live Nation, Inc. , 811 F.3d 676 ( 2016 )


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  •                               PUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 15-1278
    IT’S MY PARTY, INC.; IT’S      MY   AMPHITHEATRE,    INC.,   d/b/a
    Merriweather Post Pavilion,
    Plaintiffs - Appellants,
    v.
    LIVE NATION, INC.,
    Defendant - Appellee.
    Appeal from the United States District Court for the District of
    Maryland, at Baltimore.     J. Frederick Motz, Senior District
    Judge. (1:09-cv-00547-JFM)
    Argued:   December 8, 2015                Decided:   February 4, 2016
    Before WILKINSON, NIEMEYER, and DIAZ, Circuit Judges.
    Affirmed by published opinion.       Judge Wilkinson wrote           the
    opinion, in which Judge Niemeyer and Judge Diaz joined.
    ARGUED: Robert William Hayes, COZEN O’CONNOR, Philadelphia,
    Pennsylvania, for Appellants.     Jonathan M. Jacobson, WILSON
    SONSINI GOODRICH & ROSATI, New York, New York, for Appellee. ON
    BRIEF: Abby L. Sacunas, Philadelphia, Pennsylvania, L. Barrett
    Boss, COZEN O’CONNOR, Washington, D.C., for Appellants.     Chul
    Pak, Lucy Yen, Kimberley Piro, WILSON SONSINI GOODRICH & ROSATI,
    New York, New York, for Appellee.
    WILKINSON, Circuit Judge:
    Plaintiff It’s My Party, Inc. (IMP) contends that defendant
    Live Nation, Inc. (LN) has violated the Sherman Antitrust Act by
    engaging       in   monopolization,     tying       arrangements,       and   exclusive
    dealing    in       the   music    concert       industry.      The   district      court
    granted summary judgment to defendant LN. Because plaintiff has
    failed    to    define     the    relevant       markets   or   to    demonstrate     any
    anticompetitive conduct, we affirm.
    I.
    A.
    IMP and LN are competitors in the live music industry. Both
    promote    concert        tours   and   operate       concert     venues,     but   they
    differ in geographic reach. Plaintiff IMP is a regional player
    that promotes concerts and works with venues in the Washington,
    DC and Baltimore, MD area. Defendant LN is a national promoter
    that provides services to artists throughout the country. It
    owns, leases, or holds exclusive booking rights at venues across
    the United States. LN has expanded over time by acquiring other
    concert promoters as well as Ticketmaster, a major ticket sales
    and distribution company.
    In addition to promoting concerts, IMP and LN both                          operate
    outdoor    amphitheaters.         IMP   manages      and     operates    Merriweather
    Post Pavilion in Columbia, Maryland, and LN owns Nissan Pavilion
    (now called Jiffy Lube Live) in Bristow, Virginia. Merriweather
    2
    has a seating capacity of roughly 19,000 with 5,000 fixed seats,
    while Nissan has a capacity for 25,000 with 10,000 fixed seats.
    Concert venues range in size from small clubs with a capacity of
    about 1,000 to sports stadiums seating over 60,000.
    Artists    select       venues          based    on    their     capacity,        revenue
    potential, and the option of playing outdoors. The Washington-
    Baltimore     area     has     a    number        of       concert    venues       other    than
    Merriweather and Nissan. Among the other venues are the Filene
    Center   at    Wolf     Trap       (7,000       person       amphitheater),         the    First
    Mariner Arena (14,000 person arena), the Patriot Center (10,000
    person       arena),        the         Pier      Six        Pavilion        (4,200        person
    amphitheater),        and    the    Verizon          Center    (19,000       person       arena).
    J.A.     1516.        Notwithstanding                the     abundance        of         options,
    Merriweather has more than held its own. Between 2006 and 2012,
    it hosted an impressive line-up of prominent artists, including
    Bob Dylan, John Legend, Maroon 5, Nickelback, Nine Inch Nails,
    Sheryl Crow, Taylor Swift, The Black Eyed Peas, and The Fray.
    J.A. 827-40.
    The    basics    of        the     music        concert    industry         are     easily
    described. IMP and LN compete for the business of artists, vying
    to promote their concerts and showcase them in their venues.
    Promoters,       in    negotiation         with        artists,       work    on      financing
    concerts, arranging dates and locations, securing venues, and
    advertising.      In    terms       of    compensation,          the    artist        typically
    3
    receives either a minimum guaranteed payment or an agreed-upon
    percentage of the gross ticket sales.
    Artists have two main options for organizing the individual
    concerts that make up their tours. One approach is to use a
    different local promoter for each location and secure venues
    through the promoters. Alternatively, an artist can work with a
    national promoter such as LN for most or all of the tour. The
    two options frequently offer different modes of compensation.
    “Artists who contract with one or a few national promoters to
    organize their tours often receive a guaranteed payment from the
    promoter       based    on     the    number      of    shows     organized       by     that
    promoter. Artists who contract ‘locally’ and book with several
    promoters in various parts of the country will often receive
    instead    a    percentage       of    the     gross      ticket       sales    from    each
    concert.” It’s My Party, Inc. v. Live Nat., Inc., 
    88 F. Supp. 3d 475
    , 481 (D. Md. 2015).
    B.
    IMP was dissatisfied with the workings of the industry as
    described      above.     Plaintiff      brought         suit     on    March    5,     2009,
    alleging that LN had violated § 1 and § 2 of the Sherman Act and
    parallel    Maryland         antitrust   law      through       monopolization,         tying
    arrangements, and exclusive dealing. The result of LN’s conduct,
    claims IMP, was the foreclosure of competition in the concert
    promotion      and     venue   markets.      The       district    court       denied    LN’s
    4
    motion to dismiss in July 2009 and an initial motion for summary
    judgment without prejudice in August 2012. Following briefing
    and argument, the court granted summary judgment in LN’s favor
    in February 2015.
    In a careful opinion, the district court declined to adopt
    IMP’s     definition      of   the   promotion          market    and     excluded   the
    portion of its expert analysis defining the venue market. It’s
    My Party, 88 F. Supp. 3d at 485-88, 490-92. The trial court also
    found        insufficient      evidence          that     LN      had     engaged     in
    monopolization,       tying,    or   any    other       anticompetitive       behavior.
    Plaintiff’s state law claims were deemed to fall in tandem with
    its federal ones. IMP now appeals.
    Our standard of review is well settled. Summary judgment is
    justified if “there is no genuine dispute as to any material
    fact and the movant is entitled to judgment as a matter of law.”
    Fed.    R.    Civ.   P.   56(a).     “In   reviewing       a     motion    for   summary
    judgment, the court must ‘draw any permissible inference from
    the underlying facts in the light most favorable to the party
    opposing the motion.’” Sylvia Dev. Corp. v. Calvert County, Md.,
    
    48 F.3d 810
    , 817 (4th Cir. 1995) (quoting Tuck v. Henkel Corp.,
    
    973 F.2d 371
    , 374 (4th Cir. 1992) (citation omitted)).
    II.
    Plaintiff faces here the initial challenge of identifying
    exactly       what   market    defendant         is     accused    of     monopolizing.
    5
    Spectrum Sports, Inc. v. McQuillan, 
    506 U.S. 447
    , 455-56 (1993)
    (discussing the definition of a relevant market as a threshold
    issue for monopolization claims under § 2); Eastman Kodak Co. v.
    Image Tech. Servs., Inc., 
    504 U.S. 451
    , 464 (1992) (treating
    “appreciable economic power in the tying market” as a “necessary
    feature of an illegal tying arrangement”). In the absence of a
    plausible market definition, courts are hard pressed to discern
    the    nature       or   extent    of   any   anticompetitive     injury     that
    plaintiff and other similarly situated parties may be suffering.
    This case involves two separate but related markets: the
    market for concert promotion and the market for concert venues.
    In    both,   the    relevant     consumers   are   performing    artists,    who
    contract with promoters and venues to put on concerts. In its
    market    definition       analysis,    IMP   characterized      the   promotion
    market as national rather than local and restricted the venue
    market to major amphitheaters to the exclusion of other venues.
    As the district court recognized, these definitions were plainly
    designed to bolster IMP’s monopolization and tying claims by
    artificially exaggerating LN’s market power and shrinking the
    scope of artists’ choices.
    A.
    To support its claims that LN was monopolizing the concert
    promotion market and tying promotion services to its venues, IMP
    had to first define the promotion market and demonstrate LN’s
    6
    market     power        therein.    According      to    IMP,     promoters      compete
    nationally for contracts to promote performances anywhere in the
    country.    By     defining       the   market    as    national,      IMP    could    more
    easily construe LN’s nationwide network of promoters and venues
    as evidence        of    market    power.    In   contrast,      IMP     could   portray
    itself   as    a    modest    regional      outfit      whose    resources       pale    in
    comparison.        If    instead    the   market       were    defined       locally    and
    narrowed to just the Washington-Baltimore area, then IMP would
    appear     more     evenly    matched       against     LN’s     regional      capacity.
    Unfortunately for plaintiff, its market definitions are blind to
    the basic economics of concert promotion.
    The      relevant       geographic      market      in     antitrust      cases     is
    defined by the “area within which the defendant’s customers . .
    . can practicably turn to alternative supplies if the defendant
    were to raise its prices.” E.I. du Pont de Nemours & Co. v.
    Kolon Indus., Inc., 
    637 F.3d 435
    , 441 (4th Cir. 2011). Applied
    to this case, that inquiry focuses on the area within which
    artists can find alternative promoters if any one promoter were
    to increase its prices. The goal of concert promotion is of
    course to boost ticket sales. Therefore, artists’ demand for
    promotion     services       is    derivative     of    the    public’s       demand    for
    concert performances. Concertgoers will typically not travel out
    of their region to attend a concert in response to higher ticket
    prices in their area. Heerwagen v. Clear Channel Commc’ns, 435
    
    7 F.3d 219
    , 228 (2d Cir. 2006). Because the demand for concerts is
    local, promoters need to target their advertising to the area
    surrounding a particular venue. As the district court found in
    reviewing the record, “promoting shows is highly localized, and
    . . . most promoters promote in specific locations.” It’s My
    Party, 88 F. Supp. 3d at 492. “For example, Live Nation books
    the majority of its television advertising locally, with only
    about five percent spent on national advertising.” Id. at 491.
    These market dynamics favor promoters familiar with local
    media outlets and the local audience. An artist is unlikely to
    switch to a promoter based in Miami simply because a Baltimore
    promoter demands a bigger cut of the ticket sale proceeds. IMP
    sidesteps this point by focusing on the feasibility of promoting
    concerts     from     anywhere      using      modern       technology.       That
    technological capacity is useless, however, without the relevant
    local knowledge and local contacts. Indeed, IMP itself must be
    aware   of   that   reality     since   it   does    not   attempt   to   promote
    beyond its Washington-Baltimore base. Even a national promoter
    like LN is almost exclusively focused on local advertising and
    operates its promotion services through regional offices rather
    than a central hub. J.A. 2427. The ability of national promoters
    to coordinate cross-country tours does not change the fact that
    they provide services and compete for business on a local basis.
    Heerwagen,    435   F.3d   at    230.   In   short    then,   the    market   for
    8
    concert promotion is local, and the relevant competition in this
    case is between IMP and LN for the Washington-Baltimore area.
    The battle, in other words, is on IMP’s own turf.
    B.
    IMP’s     definition      of     the    venue     market     is        similarly
    defective.      It      first     confined       the     market         to     “major
    amphitheaters,” large outdoor spaces suitable only for popular
    artists,     while    excluding      clubs,   arenas,    stadiums,       and    other
    venues. Not content with that narrow definition of the venue
    market, IMP further specified that the amphitheaters must have a
    capacity of 8,000 or more, actually sell 8,000 or more tickets,
    and be in use only from May to September. Only two venues in the
    entire   Washington-Baltimore         area    meet    IMP’s    specifications      –-
    the   very    two    venues   featured   in    this    case,    Merriweather      and
    Nissan. IMP’s approach is akin to defining a market to include
    tennis players who have won more than three Olympic gold medals
    and finding that only Venus and Serena Williams fit the bill.
    This exercise in precise line-drawing “suits the needs of
    plaintiffs,” as the district court observed. It’s My Party, 88
    F. Supp. 3d at 488. LN’s market power appears magnified when the
    relevant market contains only two competitors, and any business
    taken away from Merriweather seems to flow directly to Nissan.
    But in its haste to stage this one-on-one showdown, IMP again
    casts sound economics aside.
    9
    Whether a product, in this case amphitheaters, commands a
    distinct       market         depends      on        whether          it      is     “reasonably
    interchangeable,” United States v. E.I. du Pont de Nemours &
    Co.,    
    351 U.S. 377
    ,    395    (1956),          with      other    products       or   the
    “extent to which consumers will change their consumption of one
    product in response to a price change in another, i.e., the
    ‘cross-elasticity of demand.’” Eastman Kodak Co., 
    504 U.S. at 469
     (citations omitted) (quoting E.I. du Pont de Nemours & Co.,
    
    351 U.S. at 400
    ).       Here,    IMP    has       not       pointed    to    any     record
    evidence demonstrating that artists are so likely to stick to
    amphitheaters            in     the     event        of        a    price      increase         that
    amphitheaters         comprise        their     own       market.        Artists     who     prefer
    amphitheaters may nonetheless turn to a lower-priced substitute,
    which, after all, allows the show to go on. There is therefore
    an insufficient basis for excluding “reasonably interchangeable”
    venues    such      as    similarly      sized          arenas      or     stadiums    from     the
    market definition.
    Plaintiff has simply not carried its burden of showing that
    amphitheaters are the only place certain artists are willing to
    perform, irrespective of the monetary or logistical advantages
    of     other    concert       locations.           As     the       district       court     noted,
    “artists       regularly        perform       at        both       amphitheaters       and      non-
    amphitheaters,” and any “artist dissatisfied with Live Nation’s
    conditioning of amphitheaters could simply perform at another
    10
    venue.” It’s My Party, 88 F. Supp. 3d at 497. IMP’s key evidence
    supporting its venue market definition –- a statistical analysis
    that    purportedly        shows     that       some     artists       prefer     either
    amphitheaters or arenas -- fails to adequately consider cross-
    elasticity      of    demand   between     the    two     types   of    venues.     IMP’s
    reliance on this evidence is akin to claiming that Pepsi and
    Coke are in different markets because consumers generally prefer
    one or the other. Mere consumer preference does not indicate
    what Pepsi enthusiasts would do in response to an increase in
    its    price.    Similarly,      a   particular         artist’s       preference    for
    amphitheaters or arenas does not reveal what the artist would do
    if the cost of performing in an amphitheater began to rise.
    In defending its market definition, IMP chides the district
    court for rigorously challenging its expert’s analysis. But that
    court     was   not     required     to    accept       uncritically      two     market
    definitions      --    a   sweeping       national       promotion      market    and   a
    cramped    amphitheater-only         venue      market    –-   that     coincidentally
    fit plaintiff’s precise circumstances. No party can expect to
    gerrymander its way to an antitrust victory without due regard
    for market realities. See E.I. du Pont de Nemours & Co., 
    637 F.3d at 442
    .
    III.
    Lacking sound market definitions, IMP’s monopolization and
    tying claims are left in a weakened state. Even assuming the
    11
    plausibility          of     those     definitions,            however,        plaintiff’s
    allegations of anticompetitive conduct fail of their own accord.
    The   bulk     of   IMP’s    case     hinges      on    two    closely      related     tying
    claims. First, plaintiff argues that artists who hire LN for its
    promotion services are compelled to perform at its Nissan venue.
    Second,      LN       allegedly      will        give     artists       access     to    its
    amphitheaters in other locations only if they choose Nissan for
    their Washington-Baltimore date. In these two claims, the tying
    products       used     to   lure     artists       are    promotion        services     and
    amphitheaters in other areas, whereas the tied product forced
    upon artists in both instances is Nissan. We will address the
    venue-to-promotion           and     venue-to-venue           tying     claims     in   that
    order.
    A.
    A tying arrangement is “defined as an agreement by a party
    to sell one product but only on the condition that the buyer
    also purchases a different (or tied) product.” N. Pac. Ry. Co.
    v.    United      States,    
    356 U.S. 1
    ,     5     (1958).      Tying     suppresses
    competition in two ways: “First, the buyer is prevented from
    seeking      alternative      sources       of    supply      for     the   tied   product;
    second, competing suppliers of the tied product are foreclosed
    from that part of the market which is subject to the tying
    arrangement.” Advance Bus. Sys. & Supply Co. v. SCM Corp., 
    415 F.2d 55
    , 60 (4th Cir. 1969).
    12
    What causes these anticompetitive harms and distinguishes
    tying from ordinary market behavior is not the mere bundling of
    two products together but rather the coercion of the consumer.
    As the Supreme Court put it, the crux of tying lies in “the
    seller’s exploitation of its control over the tying product to
    force the buyer into the purchase of a tied product that the
    buyer either did not want at all, or might have preferred to
    purchase elsewhere on different terms.” Jefferson Parish Hosp.
    Dist. No. 2 v. Hyde, 
    466 U.S. 2
    , 12 (1984), abrogated on other
    grounds by Ill. Tool Works Inc. v. Indep. Ink, Inc., 
    547 U.S. 28
    (2006)    (emphasis     added);    accord    Phillip     E.   Areeda    &     Herbert
    Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles
    and    Their   Applications    ¶   1700i    (3d    ed.   1995)   (deducing         from
    longstanding case law that “no tie exists unless the customer
    was ‘coerced’ into taking both products”). If instead the buyer
    is free to decline the tied product or to purchase the two
    products separately, then by definition there is no unlawful
    tying. See Times-Picayune Pub. Co. v. United States, 
    345 U.S. 594
    ,     614   (1953)    (stressing      the      importance     of     a    “forced
    purchase”); Stephen Jay Photography, Ltd. v. Olan Mills, Inc.,
    
    903 F.2d 988
    , 991 (4th Cir. 1990) (same). That is precisely the
    case here.
    While   paying    lip   service      to    the    tying   case       law,   IMP
    proceeds to strip the doctrine of its core element of coercion.
    13
    By its proffered definition, IMP argues that tying occurs any
    time a seller who has market power over product A offers it for
    sale together with product B. But merely offering two products
    in a single package, allowing each to enhance the appeal of the
    other, is not itself coercive. Otherwise, the seller would be
    guilty      of     anticompetitive          conduct        even    if        buyers       in    fact
    preferred        and    freely      chose    to     buy    product       A    and     product      B
    together         and    competitors         were    not        foreclosed       from       selling
    alternatives           to   product    B.    Without       the    element       of     coercion,
    IMP’s version of tying targets none of the anticompetitive harms
    animating the doctrine. Advanced Bus. Sys. & Supply Co., 
    415 F.2d at 60
     (outlining the harms to competitors and consumers).
    Without coercion -- i.e., without requiring the customer to buy
    product B when buying product A -- selling products A and B as a
    unit   is    simply         one   strategy     for    gaining       an       edge    in    a     free
    marketplace. To allow tying doctrine to swell to the point of
    prohibiting        such      legitimate       means       of    competition         would       make
    antitrust law its own worst enemy.
    B.
    A review of the facts in this case reveals IMP’s reason for
    excising coercion from tying doctrine: plaintiff has no prospect
    of   satisfying         that      element    here.    The       record       contains          little
    basis for concluding that artists were coerced into taking the
    tied product, performances at Nissan, with the tying product,
    14
    LN’s    promotion         services.      IMP      cherry-picks        excerpts        of       LN’s
    communications,            mostly       internal      emails,         that        discuss       its
    negotiations         with      artists    over      concert    tours        and    the     Nissan
    venue. In no instance, however, did LN convey that an artist
    could not receive its promotion services unless it appeared at
    Nissan. In fact, several agents specifically denied being forced
    to put their artists in LN venues as part of their agreements
    with LN. J.A. 6556-57, 6580-82. In response, IMP conjectures
    that    the    “agents         shaded    their      testimony     for        an    entity       who
    dictates whether their clients ‘work.’” Appellant’s Br. at 44-
    45. But if pure speculation by a competitor were enough to prove
    the    opposite      of     what     consumers      describe     is    happening          in    the
    market, then antitrust defendants should surrender every time a
    rival files a complaint.
    There       is,    moreover,      ample      evidence    suggesting          the     exact
    opposite      of    what       IMP   seeks   to     prove,     namely       the    absence       of
    coercion and tying. Plaintiff’s own analysis reveals that the
    tying    product         was    sometimes      sold    without        the    tied     product.
    Artists on LN-promoted national tours, the very artists who were
    supposedly strong-armed into performing at Nissan, in fact chose
    IMP-owned Merriweather fourteen percent of the time. J.A. 4630-
    31. Ten percent has been cited as the minimum benchmark for
    separate sales sufficient to rebut any inference of tying. 10
    Areeda & Hovenkamp, supra, at 328, ¶ 1756b2. Without adopting
    15
    that particular figure as the definitive baseline, we note that
    non-tied sales in this case exceed it sufficiently to cast doubt
    on any allegation of tying.
    Even without direct evidence, a plaintiff could still prove
    coercion circumstantially. See Serv. & Training, Inc. v. Data
    Gen. Corp., 
    963 F.2d 680
    , 688 (4th Cir. 1992). Here, IMP relies
    on   a    regression         analysis       purporting      to       show    that      artists       on
    national        tours      promoted     by    LN       disproportionately              perform       at
    Nissan rather than Merriweather. From that analysis, IMP infers
    that LN must be tying Nissan to its promotion services. For
    plaintiff,          there    could     be    no    other    reason          for    the    artists’
    choice to pair an LN venue with LN promotion.
    But    that    supposition         likewise       falls      short.       To    prove       an
    antitrust           violation,    a    plaintiff         must    present          evidence       that
    “tends         to    exclude     the    possibility”            of    independent             conduct
    consistent          with     competition.         Matsushita         Elec.    Indus.          Co.    v.
    Zenith Radio Corp., 
    475 U.S. 574
    , 588 (1986) (quoting Monsanto
    Co. v. Spray-Rite Serv. Corp., 
    465 U.S. 752
    , 764 (1984)). A
    successful           tying     claim    in        particular         needs        to     rule       out
    alternative market-based explanations for why the consumer might
    prefer         to    purchase    the    tied       product       along       with       the     tying
    product. See Serv. & Training, Inc., 
    963 F.2d at 687-88
    . In this
    case, IMP ignores a host of independent reasons that could have
    led artists on LN tours to freely choose Nissan.
    16
    One obvious explanation is that LN simply outcompeted IMP
    and gave artists better compensation to appear in LN venues. In
    one    case,   two       artists    declined      Merriweather          only    after    LN
    offered   100%      of    the    gross   ticket       sales    (minus        expenses)   to
    perform at Nissan and another LN amphitheater. J.A. 2716. In
    another instance, LN enticed a band to play at Nissan by adding
    $150,000 to the guaranteed payment for a slate of performances
    around the country. J.A. 6447-48. These differences in artist
    compensation offered by IMP and LN, clearly signs of competitive
    negotiations,        were       curiously     missing        from    IMP’s     regression
    analysis.
    Plaintiff also ignores the simple fact that it could have
    been more efficient for artists already on LN tours to work with
    the    same    concert       promoter       and       venue    operator        for   their
    Washington-Baltimore date. The artist may have dealt with LN on
    other occasions and come to appreciate the working relationship.
    More broadly, the national promoter holds distinct advantages
    over    its    regional         competitor:      it    can     offer    tour     packages
    combining a series of venues with promotion services in multiple
    locations.     By    contrast,       IMP    is    limited       to     the    Washington-
    Baltimore area, most likely a single stop on any given tour.
    Accepting      a    comprehensive        and      cost-effective         package      that
    happens to include Nissan is not tying –- it is simply a good
    deal for the consumer.
    17
    The final and perhaps most salient factor is that Nissan
    may be a superior venue to Merriweather. IMP scoffs at this
    idea, boasting that “Merriweather is an iconic amphitheater in a
    bucolic    setting,”       whereas     “Nissan       is     a       concrete     shell     with
    horrific parking problems.” Appellant’s Br. at 42. Setting aside
    IMP’s    potential     bias    for    its    own     venue,         Nissan     possesses    at
    least     some     advantages.       It     carries       the        prestige      and    name
    recognition       of   being       affiliated       with        a    top-flight         concert
    promoter.        Nissan     also     holds        over     5000       more      seats      than
    Merriweather, nearly all of which are fixed seats that command a
    higher     ticket      price   than       open      lawn        space,        giving     Nissan
    significantly greater earning potential. As the Supreme Court
    reminds us, “intrinsic superiority of the ‘tied’ product would
    convince    freely        choosing    buyers       to     select         it    over    others”
    without any coercion from the seller. Times-Picayune, 
    345 U.S. at 605
    ; accord Serv. & Training, Inc., 
    963 F.2d at 687-88
    . Yet
    IMP fails to account for Nissan’s or LN’s inherent advantages,
    or indeed any explanation of artists’ preference for that venue
    other than an illicit tying arrangement.
    Not only did artists have various reasons to choose Nissan
    of their own accord, but they were also equally free to turn
    down that venue or LN’s entire package deal of venues and tour
    promotion. Artists have always had two options for structuring
    their    tours.     Instead    of     contracting          with      a    single       national
    18
    promoter for all concert dates, performers can work with local
    promoters on a concert-by-concert basis and pick any venue they
    want for a specific date. If at any point LN tried to tie Nissan
    to   its   promotion         services,      the   artist       could    book     its    tour
    “locally,”     use     another      promoter      for    the    Washington-Baltimore
    area,   and    opt     for     Merriweather       instead.      When     promotion       and
    venues “may be purchased separately in a competitive market, one
    seller’s decision to sell the two in a single package imposes no
    unreasonable restraint on either market.” Jefferson Parish, 
    466 U.S. at 11
    . In other words, LN’s combined but non-coercive offer
    of   promotion       and     venues       would   not    foreclose           artists    from
    choosing Merriweather over Nissan or other venue operators like
    IMP from competing for that business. If, however, LN happened
    to   out-bargain           IMP     with     better       package        deals,         better
    compensation,        and   a     better    venue,    then      an   antitrust      lawsuit
    would not be the answer to plaintiff’s troubles.
    C.
    IMP’s venue-to-venue tying claim is largely a repetition of
    its claim of venue-to-promotion tying. The key difference is the
    tying product. Plaintiff argues that LN leveraged its market
    power in      areas    where      it   controlled       the    only    amphitheater       to
    force   artists       to   perform     at    Nissan.     Again,        IMP    presents    no
    direct evidence that LN withheld access to amphitheaters in LN-
    controlled areas unless artists chose Nissan over Merriweather.
    19
    Nor does its circumstantial evidence manage to rebut the myriad
    reasons discussed above for why artists would independently make
    that choice of venue. The mere fact that artists sometimes took
    a package deal of multiple LN venues for a given tour does not
    prove tying. At the same time, the record shows a proportion of
    non-tied     sales   that    far     exceeds   the   ten-percent    benchmark:
    twenty-six     percent       of     artists    who   performed     at   an   LN
    amphitheater in a locality where it owned the only such venue
    ended up choosing Merriweather, not Nissan, for its Washington-
    Baltimore show. J.A. 5529-30. With one in four consumers buying
    the tying product without the tied product, it becomes hard to
    accept a story of LN strapping Nissan to its other venues and
    forcing artists to perform there.
    The change in the tying product thus makes no difference to
    plaintiff’s case. IMP still fails to prove anything more than,
    as   the     district       court    found,     “vigorous   competition      by
    Merriweather and Nissan in negotiating with artists to perform
    at their respective venues.” It’s My Party, Inc., 88 F. Supp. 3d
    at 495. In a world of robust market competition where artists
    were free to take a package deal of promotion and venues, free
    to purchase those products separately, free to turn down both,
    and where they in fact exercised all those options to their
    20
    advantage, the strands of IMP’s reasoning begin to resemble the
    invisible ropes allegedly tying LN’s products together. *
    IV.
    Quite           beyond    the     specifics        of     market       definitions     and
    product       tying,       IMP       levies    a   more    general       attack.      Its   brief
    stresses LN’s market position as “the largest promoter in the
    world, larger than all other promoters combined.” Appellant’s
    Br.    at        63.    Size     and    scope,      in    IMP’s    eyes,       are    cause    for
    suspicion. LN’s nationwide reach, “1,000 artist relationships,”
    id., and exclusive access to venues are apparently so dominant
    that       the    network       itself      deters       entry    into    the    industry     and
    unfairly disadvantages localized competitors like IMP. Id. at
    63-65.      According           to   plaintiff,         “attempting      to    replicate      LN’s
    network and promotion relationships would cost ‘billions.’” Id.
    at 63.
    The sweeping attack upon LN’s size in this action cannot
    without more suffice to prove an antitrust infraction.                                        Upon
    further          inspection,         what     plaintiff        characterizes         as   illegal
    conduct turns out to be lawful pro-competitive behavior. To hold
    otherwise would have the most serious implications. Carried to
    *
    IMP’s other claims of anticompetitive conduct by LN fall
    in tandem with its tying allegations since all are based on the
    same misconceptions. Likewise, plaintiff’s state antitrust law
    claims echo its allegations under the Sherman Act and thus also
    fail. Finally, plaintiff’s remaining state-law claims fail for
    the reasons outlined by the district court.
    21
    their logical end, plaintiff’s arguments would cast a pall over
    all manner of packaged deals, free contractual negotiations, and
    any endeavor to become the dominant player in an industry. To do
    so would undermine the very competition that antitrust law was
    designed to encourage. See Verizon Commc’ns Inc. v. Law Offices
    of Curtis V. Trinko, LLP, 
    540 U.S. 398
    , 407 (2004) (“The mere
    possession of monopoly power, and the concomitant charging of
    monopoly prices, is not only not unlawful; it is an important
    element of the free-market system.”).
    The word “tying” at the core of plaintiff’s claims carries
    a   sinister   connotation,      evoking       the       image    of     an    unwelcome
    parasite tightly bound to the desired product with the helpless
    consumer    unable   to   take   one    without      the     other.      In    outlawing
    tying    arrangements,     Congress     and        the    Court       were    originally
    concerned    with    egregious   forms       of    leverage,          such    as   tacking
    superfluous goods onto a patented product. Areeda & Hovenkamp,
    supra, at ¶ 1700d. That leverage was understandably seen as an
    unfair   way   for   monopolists       in    one    market       to    invade      related
    markets. Erik Hovenkamp & Herbert Hovenkamp, Tying Arrangements
    and Antitrust Harm, 52 Ariz. L Rev. 925, 931 (2010).
    Yet even as the Court recognized that evil, it hastened to
    stress the value of offering “package sales” of multiple goods,
    “conduct    that    is   entirely   consistent           with    the    Sherman      Act.”
    Jefferson Parish, 
    466 U.S. at 12
    ; see also Serv. & Training,
    22
    Inc., 
    963 F.2d at 688
    .              What buyers often want is “the purchase
    of several related products in a single competitively attractive
    package,”         especially      where       each    component      alone     would     hold
    comparatively little value. Phillips v. Crown Cent. Petroleum
    Corp., 
    602 F.2d 616
    , 628 (4th Cir. 1979) (giving the example of
    a   restaurant          franchise    as        a     packaged      product     desired     by
    restaurateurs).          Offering        an        “attractive      package,”       however,
    becomes       indistinguishable          from       anticompetitive        conduct     under
    IMP’s conception of coercion-less tying. If that view carries
    the day, no seller could combine related goods or leverage its
    competitive         advantage       in    related          markets       without     risking
    antitrust charges.
    The real loss would be the productive synergies created
    when sellers package complementary products. LN’s business model
    serves       as   an    example.    When       LN     bundles      promotion,      including
    financing         and   advertising,          and    a    series    of    concert    venues
    together, it becomes a one-stop shop for touring artists. In
    such     a    case,     the    practice        of     “[b]undling        obviously     saves
    distribution and consumer transaction costs . . . [and] can also
    capitalize        on    certain    economies         of   scope.”     United    States     v.
    Microsoft Corp., 
    253 F.3d 34
    , 87 (D.C. Cir. 2001). Artists do
    not have to seek out and transact with separate sellers for each
    of the services offered by LN.
    23
    The whole thereby becomes greater than the sum of its parts
    as LN is able to offer advantages only made possible by selling
    distinct but complementary products together. As one example,
    managing concerts in multiple locations allows LN to “cross-
    collateralize” its tours. It’s My Party, 88 F. Supp. 3d at 481.
    The   national   promoter       can   “cover    losses    from     concerts     that
    underperformed with revenue from concerts that met or exceeded
    expectations,” thereby reducing the overall risk for itself and
    for the artists. Id. A local promoter responsible for a single
    concert in a single location lacks this risk-pooling ability. It
    is likely one reason why national promoters are often able to
    attract artists with a higher guaranteed payment, while their
    local counterparts can only offer a cut of the ticket sales for
    a particular show. Id. If, however, the packaging inherent in
    coordinating     concert    tours     were     deemed    unlawful      tying,    for
    instance of one venue to another, then this synergy and its
    attendant benefits would be at risk.
    Of course, the idea of synergy is not unique to the live
    music industry. It, and thus the potential for tying, is present
    whenever     products      or    production      processes       fit     naturally
    together. A prime example is vertical integration, where a firm
    houses     multiple   stages     of    the     production    and    distribution
    process for a single good or related goods. Andy C. M. Chen &
    Keith N. Hylton, Procompetitive Theories of Vertical Control, 50
    
    24 Hastings L.J. 573
    , 578 (1999). Take a computer manufacturer, for
    example, that “makes its own steel, types its own documents,
    creates and places its own advertising, transports the finished
    product   to       dealers,    or    repairs      the    product       in    the    hands       of
    consumers. To that extent it ‘forecloses’ independent makers of
    steel   or    suppliers       of    typing,       advertising,        transportation            or
    repair services.” Areeda & Hovenkamp, supra, at ¶ 1700j1. One
    could conceivably accuse the vertically integrated manufacturer
    of tying those goods and services together in selling the end
    product, the computer.
    And yet it is no surprise that vertical integration has
    generally      been      permitted    despite       its     apparent         similarity         to
    tying. See id. (noting antitrust law’s tolerance of vertical
    integration);         Roger   D.     Blair    &    David       L.    Kaserman,          Vertical
    Integration, Tying, and Antitrust Policy, 68 Am. Econ. Rev. 397
    (discussing        the     functional        similarities           between        tying       and
    vertical integration). A single firm incorporating separate but
    closely      related      production     processes         can      often     be    far       more
    efficient      than      various     independent           entities      transacting            to
    produce the same good or bundle of goods. See Jefferson Parish,
    
    466 U.S. at 41
     (O’Connor, J., concurring in judgment) (quoting
    Fortner   Enters.        v.   U.S.    Steel       Corp.,    
    394 U.S. 495
    ,       514    n.9
    (White,      J.,     dissenting)       (1969)).         With        advances       in    modern
    technology         comes      even     greater          potential           for     efficient
    25
    integration,     increased    compatibility      among   products,    and    ties
    that are technological as much as or more than contractual. See
    Areeda & Hovenkamp, supra, at ¶ 1701d. It would be unfortunate if
    an    overly   aggressive     tying   doctrine      were   to    impede      that
    innovation.
    Because concert venues and promotion are not technically
    part of the same production process, this may not be a case
    involving vertical integration per se. Nonetheless, one can see
    how IMP’s expansive tying definition could chill constructive
    forms of integration. Unable to sell goods and products as a
    single unit, businesses may have little reason to consolidate
    underlying     production    processes     and   promotional    strategies    no
    matter how efficiently they fit together. The eventual outcome
    would be a strange world in which sellers go out of their way to
    isolate their own products and different components of their
    production and promotion processes from one other.
    The ultimate victim in that scenario would be the consumer
    and   his    ability   to    freely   contract     for   desired     goods   and
    services. So long as a transaction is free from coercion, the
    consumer has every right to walk away from package deals or
    demand more from the seller. It is paternalistic for either a
    competitor or the court to just assume that taking two products
    together is not the result of independent decision-making. See
    Microsoft, 
    253 F.3d at 87-88
     (reiterating consumer choice as the
    26
    touchstone       of    tying      doctrine      and    the      need     to    assess    whether
    consumers prefer to buy products together).
    From     its        market      definitions           to     its       descriptions       of
    anticompetitive conduct, IMP’s entire case sets up a David-and-
    Goliath battle between an industry behemoth and its regional
    challenger. The tying argument in particular is predicated on
    the fact that LN can leverage its sprawling national network of
    promoters and venues to oblige artists to perform at Nissan. At
    certain     points,         the    whole    argument         seems       to    turn     on   LN’s
    dominant market position, on what LN is rather than what it did.
    It may be understandable as a matter of strategy for antitrust
    plaintiffs to target industry giants. Certainly, many such cases
    do require a finding of market power, and the evidence may show
    what it fails to show here, namely that the dominant player in
    an industry used that very domination for anticompetitive ends.
    See E.I. du Pont de Nemours & Co., 
    351 U.S. at 389-90
     (focusing
    monopolization          doctrine     on    the     exercise         of      market    power    to
    foreclose fair competition).
    And    yet       big    is    not    invariably         bad.      An     outsized    market
    position may reflect nothing more than business success achieved
    through superior effort and sound strategy. See United States v.
    Grinnell    Corp.,       
    384 U.S. 563
    ,     570-71        (1966).       After   all,    the
    purpose     of        antitrust      law     is       to     penalize         anticompetitive
    practices, not competitive success. Even monopoly power, long
    27
    considered       a    red    flag     in    antitrust       law,   can    under    certain
    circumstances be a legitimate advantage:
    Firms may acquire monopoly power by establishing an
    infrastructure that renders them uniquely suited to
    serve their customers. Compelling such firms to share
    the source of their advantage is in some tension with
    the underlying purpose of antitrust law, since it may
    lessen the incentive for the monopolist, the rival, or
    both to invest in those economically beneficial
    facilities.
    Trinko, 
    540 U.S. at 407-08
    . LN invested heavily in developing
    just such an infrastructure, expanding beyond its core promotion
    business to acquire exclusive booking rights at concert venues
    nationwide           and     merging       with       a    leading     ticket      vendor,
    Ticketmaster. The synergies among promotion, venues, and ticket
    sales, all of which serve to bring live music to the public,
    should be obvious.
    In     a        world    where        the    “big     is   bad”      mantra     reigns
    unquestioned, we would be left with separate tour promoters,
    separate venue operators, and separate ticket vendors, each with
    little incentive to interact or join with the others despite
    their natural affinities. See Fed. Trade Comm’n v. Proctor &
    Gamble Co., 
    386 U.S. 568
    , 597-98 (1967) (Harlan, J., concurring)
    (considering          the    possible        efficiencies       created      by    merging
    producers       of    complementary         goods     in   adjacent      markets).    IMP’s
    tying allegations thus threaten in the end to bring us three
    forms of strict economic segregation, first of products, then of
    28
    production      processes,     and       finally       of    producers     in     adjoining
    markets. It is not wholly fantastical to wonder if even ketchup
    and mustard, salt and pepper, forks and knives will have to bid
    each    other    adieu,      doomed      to     solitary       existences       along     the
    grocery aisle.
    The     Davids   of    the       world        need    not   hope    for     such      a
    marketplace in order to thrive. Just as big is not necessarily
    bad, small is not necessarily weak. Even though national firms
    undoubtedly have an edge over smaller competitors and David may
    not triumph over Goliath everywhere, he can certainly hone his
    home    court     advantage.        While       LN     was    busily      spreading       its
    operations all over the country, IMP could have focused instead
    on   branding     itself     as     a    uniquely        attractive       local    outfit,
    striving to know the Washington-Baltimore audience better than
    any other promoter and deepening its relationships with local
    clubs, businesses, and media. As it is, IMP has in fact enjoyed
    much success at its Merriweather venue, hosting scores of major
    artists and doubling its revenue from $11.8 million in 2006 to
    $22.5 million in 2012. J.A. 827-40, 4908.
    IMP’s    distortion     of    tying         doctrine    serves     in    fact    as   a
    potential template for any local business wishing to drive a
    national competitor out of its regional market. That template
    would   prove     particularly          useful       when,    as   in   this    case,     the
    competition is on a local basis and the competitors are a mix of
    29
    national and local players. If offering products or services
    across a particular field is tying and if a national network is
    itself   suspect     when      compared    to     the    resources       of    a    regional
    contender, then businesses have much less motivation to operate
    in    multiple    geographic          markets.    Why     shoulder       the       costs    of
    expansion when the specter of antitrust liability awaits?
    Cornering      the      local    Washington-Baltimore             market      may    not
    have been far from IMP’s mind. Seth Hurwitz, IMP’s principal,
    has protested that “the scourge of the [live music] industry is
    too many shows.” J.A. 1566. According to Hurwitz, LN was “paying
    way too much money just to keep [a] show away from [IMP],” and
    the bidding process for concerts –- the key mechanism for price
    competition among promoters -- made it “prohibitive to actually
    do a show and make money.” J.A. 1560, 1562. To ease what it
    considered an excess of competition, Hurwitz sought to eliminate
    its    archrival.        He     suggested        either        that     LN     “sell       the
    Nissan/Jiffy      Lube     property”      or     that    the    two     promoters      “work
    together”    to     stop      bidding    against        each    other    when      bringing
    artists to the Washington-Baltimore area. J.A. 1560-62, 1570.
    After failing to collude with LN or expel it from the market,
    plaintiff turned to the next best option –- antitrust law.
    This   case    thus      captures    the     anticompetitive            effects      and
    consequences that can ironically arise from antitrust lawsuits.
    See Matsushita Elec. Indus., 
    475 U.S. at 594
     (warning against
    30
    allowing      antitrust       doctrine      to    “chill         the    very    conduct      the
    antitrust laws are designed to protect”); William J. Baumol &
    Janusz A. Ordover, Use of Antitrust to Subvert Competition, 
    28 J.L. & Econ. 247
        (1985).       This         can   be    a    special      hazard    in
    antitrust litigation brought by competitors of the defendant.
    See Edward A. Snyder & Thomas E. Kauper, Misuse of the Antitrust
    Laws: The Competitor Plaintiff, 
    90 Mich. L. Rev. 551
     (1991). If
    abused, such suits can ineluctably lead to an environment of
    commercial parochialism. By cutting ties among related products
    and    related     producers,       IMP’s    view       of     economic        activity,     if
    allowed    to    take     hold,    would     box       firms      both       into   their    own
    product    markets      and    into   their       own       geographic        locales.      That
    tendency toward isolationism has more in common with the market
    squares and horse-drawn buggies of the nineteenth century than
    with    the     interconnected        and        technology-driven              contemporary
    world. The loser in all this is of course the consumer, left
    with a patchwork of localized monopolies and one-product wonders
    flourishing        at   the       expense        of    larger          and     more    diverse
    competitors. To help prevent antitrust law from being hijacked
    for such anticompetitive ends, we join the district court in
    sending this tussle between two rivals back to the marketplace
    from whence it came. The judgment is hereby
    AFFIRMED.
    31