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Ticketmaster forcing customer disputes to “Kafkaesque” arbitrator back in the spotlight in US court

By Chris Cooke | Published on Friday 14 July 2023

The way in which Live Nation’s Ticketmaster forces customer grievances in the US into arbitration was back in the spotlight in an American court this week. While judges have generally agreed in the past that Ticketmaster’s terms do mean that pissed off customers have to take their complaints to an arbitrator rather than a court of law, there has been criticism of late about the ticketing company’s current choice of arbitrator which, complainants say, employees practices that are “non-traditional” and “Kafkaesque”.

There have been a number of lawsuits filed against Ticketmaster in recent years in which the ticketing firm has responded by stating that the plaintiffs in those cases are obliged – according to the ticketing site’s terms and conditions – to take their complaints to the company’s chosen arbitrator, rather than proceeding with litigation in court.

And generally that argument has worked, even though we all agree that pretty much nobody buying tickets from Ticketmaster has ever read those terms and conditions.

However, Ticketmaster changed its arbitrator of choice from a company called JAMS to one called New Era. It argues that New Era is better set up to deal with complaints where there are lots of concurrent complainants, which is common in the ticketing market. But some of those complainants argue that New Era is biased in favour of the ticketing firm, adding that the processes employed by the company are “non-traditional” and “Kafkaesque”.

The switch to New Era has become a key debate in a lawsuit filed against Ticketmaster accusing it of anti-competitive conduct as part of the wider Live Nation business. Those claims have been made by various parties before, of course. But when its Ticketmaster customers doing the claiming, the ticketing firm has sought to keep said claims out of the courts by forcing arbitration.

In addition to dissing the way New Era works, the plaintiffs in this lawsuit have also been critical of the way the switch from JAMS to New Era took place. And, according to Law360, the concerns about how the switchover was managed seem to be shared by the judge overseeing the case, George H Wu.

The plaintiffs argue that when Ticketmaster changed the name of their chosen arbitrator in the terms and conditions on its site, it “slid this change into terms that most consumers had previously agreed to, without flagging the dramatic shift being made”.

Technically Ticketmaster’s terms allow it to make changes in that way, but in court this week Wu expressed concern that such a change – which can impact significantly on how any arbitration process might work – can be made without customers being specifically notified.

“There are questions as to why there wasn’t any notice of this provided”, the judge remarked, according to Law360. Noting that providing such a notification would be relatively cheap and easy to do, he added: “It boggles the mind as to why that wasn’t done here, just to give some sort of notice for people potentially going onto the site”.

Ticketmaster continues to deny that there are any issues with New Era. Plus, even if there are, there is a system in place to move the dispute to an alternative arbitrator. So, it argues, even if Wu was to conclude that the shift to New Era without formal notification is a problem, that might allow the plaintiffs to insist on an alternative arbitrator, but it shouldn’t result in the lawsuit proceeding in court.

We now await to see what decision Wu actually makes on all this.