Former Ticketmaster Executive Sentenced for Hacking Rival Company Crowd

A former senior executive at Ticketmaster, Stephen Mead, has been sentenced after pleading guilty to hacking into the servers of a rival company, CrowdSurge. The British national was found to have illegally accessed sensitive information between 2013 and 2015, causing significant damage to CrowdSurge and directly contributing to its eventual downfall, according to the U.S. Department of Justice (DoJ).

Mead was ordered to pay a $67,970 forfeiture (approximately £52,000) and was sentenced to a year of supervised release. His hacking activities included accessing confidential data and sharing it with Ticketmaster executives to gain a competitive advantage in the ticketing industry.

The Rivalry Between Ticketmaster and CrowdSurge

CrowdSurge, a London-based company with an office in New York, was once a fierce competitor to Ticketmaster, allowing artists to sell pre-sale tickets directly to fans. The company had an estimated value of over $100 million before the hacking scandal surfaced.

Mead, who had been senior vice president of global operations at CrowdSurge before leaving in 2012, breached a legal separation agreement by accessing CrowdSurge's confidential information. He shared client lists, marketing strategies, and sensitive financial data with Ticketmaster after being employed by its parent company, Live Nation.

Hacking and Competitive Sabotage

Between August 2013 and December 2015, computers associated with Ticketmaster's offices in New York, San Francisco, and Los Angeles accessed CrowdSurge's servers at least 25 times. Mead, along with other Ticketmaster employees, used passwords to access CrowdSurge's proprietary systems and shared internal spreadsheets and information about the company's clients.

The stolen data, including real-time ticket sales and artists' identities, was used to plan strategies that undercut CrowdSurge's business. Mead even demonstrated CrowdSurge's exclusive product, the Artists' Toolbox, during a presentation to 14 Ticketmaster executives, logging into CrowdSurge's system in front of them.

According to court documents, Mead's actions were encouraged by Ticketmaster's leadership, with former executive Zeeshan Zaidi also implicated. Zaidi, who pled guilty to fraud charges in 2019, is yet to be sentenced.

Legal Repercussions for Ticketmaster

The hacking was discovered in 2015, when a former Ticketmaster executive joined CrowdSurge and warned the company to enhance its system's security. This led to legal action in which CrowdSurge's parent company accused Ticketmaster of monopolistic practices, including blocking artists from using its services after the company merged with SongKick.

Ticketmaster later settled the lawsuit by paying $110 million to SongKick and acquiring its ticketing technology. In 2020, Ticketmaster entered into a deferred prosecution agreement with the DoJ, admitting to five charges of fraud and paying a $10 million fine.

Mead was arrested in Italy earlier this year and extradited to the U.S., where his employment with Ticketmaster had already been terminated in 2017. Despite the severe consequences for CrowdSurge, it was noted that Mead did not personally profit from the illegal activity beyond securing a pay rise and improved standing within Ticketmaster.