Questions We’d Like to See Answered at the FTC Online Ticket Sales Workshop

https://www.ticketnews.com/2019/06/questions-ftc-online-ticket-sales-workshop/

By: Sean Burns

On Tuesday morning, the attention of the ticket-buying world will be fixed firmly on Washington D.C., as the Federal Trade Commission hosts its Online Ticket Sales Workshop, set to begin at 9:30 AM. The schedule and panels are posted, so we have a general idea of the topics that will be covered.

We’ve already covered why it’s important for everyone in the business to have an eye on the proceedings (and TicketNews will provide live coverage and updates throughout the day as we watch the webcast). But as we look forward, here’s some questions we’d love to see posed to the experts on both sides of the aisle as the workshop unfolds.

Feel free to chime in with your thoughts in the comments.

Panel 1A: Bots and the Bots Act

Defining Bots – Is delivery of the product part of the sales process? If so, are automated ticket download processes (such as those run by Ticketmaster.com and Vividseats.com) in violation?

The biggest question related to bots right now isn’t whether or not the kind of “bot” consumers are being asked to believe are grabbing every ticket out there during sales are a bad thing – it’s what defines a bot anyways? Even companies managing bot mitigation services can’t say much about the so-called bots they say are ravaging these systems. Ticketmaster’s Trade Desk has been subject to consumer lawsuits over whether or not it constitutes a bot itself, helping secondary ticket resellers directly from within Ticketmaster’s system (so long as they’re benefitting Ticketmaster’s bottom line). What counts? What doesn’t?

What is the difference between the agreed “bot” bad actor grabbing tickets and pushing prices higher, and the primary seller and promoters doing that themselves?

If a reseller uses a computer program to grab tickets and sell them for double the amount they were originally listed for, it’s a bot and that’s bad. But what about when promoters bump prices up on the fly within minutes of tickets going on sale? Consumers have long reported seeing tickets displayed at one price on a seat map, clicking to add them to their cart, and seeing the prices go up dramatically instantaneously. If they’re serving the same purpose as these nefarious “bots,” why are those actions legal?

Panel 1B: Other Consumer Protection Issues around Ticket Availability

If some states are requiring tickets to be fully transferable by the general public, why isn’t the federal government avoiding having a similar regulation?

Connecticut, New York and Virginia have all enacted laws designed to require promoters and venues make the consumer right to transfer tickets a part of the onsale process. Operators selling tickets must give consumers the option to purchase tickets in a format which is freely transferable – so why isn’t there more discussion of this consumer-friendly requirement being expanded to a federal one?

If restricting transferability of tickets is a proven factor in the increase of ticket prices, why are operators allowed to do so?

According to statements made by Live Nation itself, restricting the transfer rights for consumers who purchase tickets is often a factor in ticket prices going up. So why are they allowed to do it?

In recent years, teams and other rights-holders have begun leveraging the enormous amount of data required of consumers in their terms and conditions to harm those same consumers. They have cancelled season tickets of individuals who sell their tickets too often, cancelled orders by consumers outside of a particular geographic area, and gone after small businesses over resold tickets.

Why isn’t anything being done to protect consumers from the organizations they’ve paid good money to purchase tickets from?

For ages, rights-holders have played games with what actual amount of tickets are available for events – creating an artificial scarcity that keeps prices high by making it appear as if an event is on the brink of selling out regardless of if prices are higher than the consumer had been led to believe they would see between dynamic re-pricing and “platinum” tickets often many multiples higher than the published prices. What will the FTC do about these dishonest practices employed explicitly to keep prices high?

Holdbacks – the practice of withholding a large number of tickets from the general public for artists, presales, or to be released in small batches after consumers have been led to believe an event is already sold out – have been a major issue for years. Promoters leverage them to push prices ever-higher while claiming “bots” or the secondary ticket market is to blame for every consumer complaint.

Meanwhile, when legislation is proposed to address this anti-consumer practice, promoter and venue cartels threaten tours will simply skip locations which require information about how many tickets are available. That says something very notable about how much this is used to benefit promoters at the expense of consumers.

Panel 2: The adequacy of ticket price and fee disclosures

What is a service fee? Who benefits from it? Why shouldn’t consumers know?

The service charges that consumers often pay on tickets is actually an enormous gray area in the ticketing world. Often, those fees are blamed on the ticketing provider, but are actually going back to the teams and artists as a part of their payment. So why isn’t that considered a part of the ticket price?

This is particularly relevant in states or localities where taxes on event admission are involved. If the tax only applies to a ticket price, but then the venue, promoter and artist are getting a cut of untaxed service fees on top of that, isn’t that by definition tax fraud?

If tickets are advertised at one price, but no consumer has any chance to actually purchase tickets at that price, how is that not deceptively misleading to consumers?

Tickets go on sale, having been advertised as being available at a range of prices from $60-180. When consumers get to the website, those $60 tickets are actually $97.75 after fees, and there’s only 100 of them available (and sold immediately). Or, there are some left that once had been $60, but have been dynamically re-priced to $100 even before the first customer was allowed out of the ticket waiting room for their chance to buy the tickets. How are consumers expected to have any chance to pay a fair price when the prices they thought they might see were a lie from the beginning?

There was actually a lawsuit surrounding this practice brought in New York in 1992 – as part of a settlement with the state’s Consumer Affairs office, a promoter which has since been gobbled up by Live Nation simply stopped listing sales prices in advertisements, instead relying on the media to report the artificially pre-fee “price” to get around the potential fines faced.

Panel 3: Consumer confusion: What and from whom am I buying?

If speculative ticketing is such an anti-consumer practice, why are rights-holders allowed to practice it?

One of the largest bogeymen in the anti-resale crusade is the practice of speculative ticket resale – essentially short-selling tickets (offering for sale at a price, then scooping tickets up once a consumer agrees to pay that price for them). But often, particularly in the case of large-scale festivals, a number of the elements of a production are not under contract when tickets go on sale.

Is that not itself speculative in nature? What penalties should exist for events put on sale without every aspect of their production locked down under contract?

Every week, it seems, the goalposts are moved on disclosure requirements to stay within guidelines for search advertisements. Why aren’t the rules the same for everyone?

Consumers searching for any event tickets see ads atop every search engine. They offer tickets for the event, but it can be hard to know who’s selling the tickets being offered. That is, until you get to the page, where a ticket seller or re-seller has to disclose in plain language at the top of the page consumers are sent to when they click an ad that they are a reseller and prices may be above or below face value.

One place where consumers can be misled is in the fact that secondary ticket sellers are required to disclose service fees charged on a transaction up front – while primary sellers are not. Why would a consumer benefit from seeing the full price up front in a resale transaction but not on a primary transaction?

Why is the government not taking action on a vertical monopoly at the center of the multi-billion dollar live event space, in favor of policing resale businesses causing consumers a fraction of the issues such a monopoly causes?

This one may or may not see the light of day in the conversation Tuesday, but it’s probably the most important question in ticketing right now. Live Nation is the largest promoter in the world. It manages artists, runs venues, and operates Ticketmaster, which controls ticketing at events throughout the world with exclusive contracts.

Examples abound regarding how injurious this type of thing can be for consumers. Yet there has been no real action taken at all since the merger of Live Nation and Ticketmaster back in 2010.

At the dawn of the golden age of movies, similar businesses operated in that space, with giant companies owning the movie studios, holding actors under exclusive contract, and owning the very theaters where they showed the films. That was broken up, and it created the modern movie industry. Shouldn’t that type of action be under consideration here before Live Nation controls every aspect of the music and event business?

If high ticket prices are the biggest symptom of problems in live events, why are rights-holders allowed to set minimum prices they’ll allow tickets to be sold for?

“Floor prices” are a practice set by ticketing providers on resale markets they control (and they control them with increasingly tight policies, such as rotating barcodes that make it impossible for consumers to list tickets purchased for some events anywhere but the same place they bought them, itself an anti-competitive and anti-consumer practice). Basically, if you buy tickets for, say, the New York Giants and then can’t make it to a game, you’re only allowed to sell them on the Giants’ preferred resale platform. But, if the team wants, it can set a minimum price – making it harder to sell tickets if that minimum is below what the market wants to pay for that particular event.

Such minimums are harmful to consumers because they make it less likely that they can recoup their cost, or even a part of that cost, for an event they can’t attend and the team won’t give them a refund on. This just means prices stay high, even when the market says they should go lower.


There’s some other thoughts rattling around in our heads, but we figure we’ve put enough thoughts out there at approaching 2,000 words. What are the questions you’d like to see at Tuesday’s FTC Workshop?