March 5, 2019
By: Taylor Porco
In an era of monopolies dominating almost all industries, consumer privacy, transparency and fairness are being negotiated in legislative sessions throughout the country. When non-negotiable and imperative rights are up for debate, we have to begin to question the line between government responsibilities and corporate greed; two concepts that should not coincide synchronously. Current legislation in Rhode Island portrays the irony between the government’s presumed responsibility to create regulations to prohibit monopolies, yet its actual role in promoting them.
The general statute on ticket reselling in Rhode Island, like most states, has been up for debate for decades. During the 2019 legislative season, StubHub proposed that the ticket reselling general statute be amended to prohibit speculative ticketing and to require transparency on the number of available tickets for sale to the general public. Speculative ticketing refers to the act of listing inventory that a reseller may not currently possess but assume or know that they will acquire that inventory in the future. StubHub’s proposal is two-pronged.
Requiring transparency on the number of available tickets for sale to the general public supports consumer rights, yet StubHub’s past in mass-market scalping tells a different tale. A surface level reading of the proposal prohibiting speculative ticketing may suggest hints of consumer protection, yet if you look closer, their hidden agenda emerges behind those words.
By creating a prohibition on offering tickets not currently in possession of the reseller, the proposed amendment forces artificial restraints on the free market which overall leads to higher prices for consumers. It can be reduced to the most famous economic law: supply and demand. As the supply of tickets dwindle, the prices on both the primary and secondary markets rise. The National Consumer League’s guide to buying event tickets notes that “it decreases the supply of tickets available on the secondary market, inevitable leading to higher prices.”
This proposal creates a barrier for many sellers and resellers that do not always have access to tickets that they have purchased before they are printed, available on the open market. This often occurs with season and subscription ticket holders, whereas one might have purchased tickets for every game, but does not have direct access to them until they are delivered or available by the venue.
Not only will this hurt consumers and ticket resellers, but it disadvantages smaller businesses who may not have exclusive contracts with venues, leagues and corporations like StubHub and Ticketmaster do. These laws benefit ticket reseller monopolies like StubHub and Ticketmaster by removing smaller businesses from the marketplace and overall diminishing supply. As supply decreases throughout the marketplace, prices raise and consumer choice diminishes.
This isn’t the first time Ticketmaster and StubHub have attempted to alter the marketplace and weed out competitors, while harming consumers in the process. Specifically, Ticketmaster has been investigated various times for holding back tickets and conspiring with ticket resellers in order to raise prices and double their profit. Ticketmaster and StubHub’s monopolist agendas continue to disenfranchise small and minority businesses. Part of the monopolist charm is the ability to pay lobbyists for laws that will keep their companies on top, while eliminating others. For big corporations, if you have the funds, you can create your own rules.
Thankfully, several political leaders and the US Minority Ticketing Group (USMTG) fought back against the proposal by adding a comprehensive amendment to the general ticket selling statute. Representative Michael A. Morin, Representative Camille F.J. Vella Wilkinson, Representative Stephen M. Casey, Representative Gregg Amore, and Representative Christopher T. Millea proposed a comprehensive amendment that fights for fairness, transparency and consumer privacy protections. Without leaders like these, fairness and consumer privacy in the marketplace would be prohibited and diminished substantially.
Organizations like the USMTG, a national association of ticket industry professionals and other event professionals in the entertainment industry, are fighting nation-wide against the attack on small and minority owned businesses.
“This is another prime example of corporate business tycoons and big money fat cats striving to squeeze honorable small businesses out of the ticket industry,” Scot X. Esdaile, Executive Director of the USMTG, stated in response to the proposed amendment. With the leadership of state representatives, the USMTG supports the legislative initiatives to improve and implement consumer protection standards across the nation.
Rhode Island has the chance to expand consumer protections and protect small businesses from the monopolizing control of corporations like Stub Hub and Ticket Master. Consumers deserve to make informed decisions on their purchasing power with access to knowledge about current legislative initiatives affecting them and their lives. Consumer privacy, transparency and fairness are imperative and obligatory rights that need to be protected from monopolizing corporations by the government, not urged.