Business News Legal Live Business Top Stories

Fewer bots and more transparency demanded at FTC session on the American ticketing market

By | Published on Thursday 13 June 2019

Ticket touts

Killing the bots and declaring the fees were two key talking points during a full-day debate on the ticketing market organised by the Federal Trade Commission in the US on Tuesday.

Ticketing bots are already officially banned in the US but the sanctions aren’t sufficiently harsh, some said, while there was also talk about possible new rules forcing all ticketing sites to declare their fees upfront, something that has already been introduced – in one way or another – in some other countries.

The FTC announced last October that it would stage what it called a full-day workshop in order to debate some of the big issues in the American ticketing market. It was originally scheduled for March, but Donald Trump’s government shut down earlier this year forced the whole thing to be postponed until June.

That October announcement came in the wake of media coverage Stateside about Live Nation’s Ticketmaster, relating to allegations of anti-competitive conduct and revelations about the way it works with ticket touts, or scalpers as they say in the US.

Though at the time Live Nation was keen to point out that the FTC workshop was set up to discuss the entire ticketing market – primary as well as secondary – and was not happening just to bash its Ticketmaster division and/or online ticket touts and the companies that support them.

Bots were the first topic for discussion during the session. By bots, of course, we mean the software some ticket touts use to hoover up large numbers of tickets from the primary sites in order to resell them on the secondary market. For in-demand events, touts employing such technology can result in very rapid sell-outs, meaning even eager online-early-ready-to-refresh-and-click fans are unable to access tickets at face value from a primary seller.

In many countries where online touting has proven controversial and market regulation has been considered, a bots ban is often the first thing to be discussed. That’s partly because most lobbyists for the secondary ticketing market – representing touts and the websites they use to resell tickets – normally support such a ban, officially at least.

Back in 2016 the US introduced a country-wide bots ban – even though ticketing is more commonly regulated at a State level – via the Better Online Ticket Sales Act, aka the Bots Act. However, various people participating in Tuesday’s workshop insisted, the penalties enabled by the Bots Act are not severe enough, so it hasn’t resulted in the desired cut-back on the use of bots by the touts.

According to Law360, Joe Ridout of consumer rights group Consumer Action said that the FTC being able to fine those using the bots was not a big enough deterrent. “The penalties just aren’t sufficient to deter bad actors without criminal penalties”. The FTC should also bring tech firms into the debate on bots, he added, before stating: “We need to do more if we’re going to get to the bottom of who’s behind bots”.

Some anti-touting campaigners reckon the bots ban debate is something of a distraction, and that ticket resale sites like talking about banning the bots because it puts off discussions about other kinds of regulation for the secondary market. And anyway, it’s hard for US authorities to target anyone buying up tickets with bots from outside America. And even with a bots ban in place, touts can employ teams of people to manually harvest tickets, which may be more expensive, but not so much so that it will deter industrial-level touts.

As for other regulations of the resale market – like those that have slowly been introduced and then enforced in the UK and elsewhere – that tends to happen at a State-level in the US. Some states have introduced some regulations, while others have instead sought to regulate against concert promoters that seek to restrict the resale of their tickets.

However, across the country, there are generally still many more people willing to publicly campaign in favour of ticket touting than in Europe, mainly by employing the usual arguments.

There’s the key argument that consumers should have the right to resell tickets. Then that promoters shouldn’t be allowed to interfere with that right. And after that, the claim that without legit resale sites consumers would end up on rogue websites in foreign places where they would be more regularly ripped off.

Other arguments still being employed by the pro-touting lobby in the US include that tickets routinely sell for below face value on the secondary platforms – ie not every touted ticket comes at a massive mark-up – and with sell-out shows, where the price-hikes kick in big time, that’s the fault of artists for not playing more gigs and/or bigger venues.

Another discussion point at Tuesday’s workshop applies as much to primary ticket sellers as it does the resale platforms. That being the mega-fees ticketing sites usually charge, on top of whatever the face value of the ticket may be.

Consumers rarely understand and universally hate these fees, which are particularly steep in the US. Although getting rid of them would involve reworking the live music business model, and the deals done between artists, promoters and ticket agents.

However, even if the steep fees are necessary, they could still be communicated better, so that the consumer is told the full price of their ticket – including all the fees – on the first web page they visit, not 20 minutes later after navigating numerous web pages and filling out an assortment of tedious forms.

Declaring the full-cost of tickets upfront has become the norm in some other markets, either as a result of consumer rights law or industry initiatives in response to consumer pressure. In the UK, on the secondary side, upfront declaration of all fees was one of the demands made by the Advertising Standards Authority last year.

According to Vox, the ticketing platforms involved in this part of the discussion on Tuesday – both primary and secondary – seemed to say they’d welcome some regulation on this point in the US too. Because if and when sites voluntarily start declaring the full cost of tickets upfront, they lose competitive advantage. If it’s not universal, people shopping around online will assume (incorrectly, of course) that sites hiding the fees are better value.

StubHub’s rep at the session, John Lawrence, said that his company’s experiment with declaring the full cost upfront on its US site confused customers and lost his company business. “This is a textbook place where a regulator could make a big difference”, the academic on the panel, MIT’s Sara Fisher Ellison added, because a new rule on declaring all fees upfront would force everyone to shift over to that system at the same time.

Vox’s reporter adds “essentially every person on the panel agreed, appearing to politely beg the FTC to regulate them so that people would like them again”.

So there did seem to be some appetite, even among the touting lobby, for further regulation on bots and transparency. Although there remains much resistance, in some quarters at least, to restricting the resale of tickets in the US – either with outright bans or a restriction on mark-ups, like those proposed or passed in Ireland and Australia.

After the session, the boss of the National Association Of Ticket Brokers, Gary Adler, said: “Hopefully the workshop is the catalyst for much-needed change in the ticketing system, as there is existing authority at the FTC as it relates to deceptive advertising and marketing practices which means the Commission can act now, and where new authority is needed, there were renewed calls at the workshop for federal legislation to provide that authority or to create new rules for the ticketing market”.

Ticket resale remains big business in the US of course – hence Live Nation’s decision to shut down its resale sites not applying to America. But there could as yet be more efforts to bash the bots, and introduce a little more transparency to help consumers understand quite how much buying a ticket to an in-demand show will actually cost.