The Federal Trade Commission is being asked to investigate tech companies that create tools for ticket scalpers that violate existing laws and inflate the price of concert tickets.
The warning and call to action comes via a letter signed by the president of the National Independent Talent Organizations Jack Randall and executive director Nathanael Marroaiming for the World Ticket Summit. The annual conference, held in Nashville earlier this month, is organized by the National Association of Ticket Brokers, the nation's largest membership organization for professional ticket resellers and people who list and resell tickets on sites like StubHub and SeatGeek.
At this year's summit, NITO members – representing independent talent agencies and management companies including Arrival Artists, High Road Touring, Paladin Artists, Q Prime, Red Light Management and TKO – “observed a sold out exhibit hall filled with vendors who were selling and marketing products designed to bypass security measures for ticket purchases, in direct violation of the BOTS Act,” Sept. 9 letter to the chairman of the Federal Trade Commission Lina Kan is reading.
This technology includes web browser extensions that create multiple tabs covering a user's IP address, proxy services that allow users to log into multiple ticketing accounts from one location, and virtual credit card services that bypass geographic restrictions on ticket sales, the which are often put in place by event organizers to ensure fair access for local fans.
According to the letter, using this type of technology to procure concert tickets is a violation of the Better Online Ticket Sales (BOTS) Act of 2016, which prohibits scalpers from using technology that circumvents “a security measure, access control system, or other technological measure used to impose ticket purchase limits for events with more than 200 attendees'.
Simply put, most ticket companies put a cap on how many tickets a fan can buy for a concert, and using automated bots, proxies, VPNs, and fictitious credit cards to exceed purchase limits is a violation of the BOTS Act.
“The presence of these vendors at a conference specifically for ticket brokers strongly suggests that a significant portion of attendees either currently use these services or are likely to do so in the near future,” the letter states. “This widespread availability and apparent demand for tools that can bypass ticketing limits suggests that many, if not most, scalpers are operating in violation of the federal BOTS Act.”
Executive Director of NATB Gary Adler issued a lengthy statement in response to NITO's letter, writing “The vast majority of technology exhibitors at the conference were inventory management systems that help ticket companies organize their tickets, offer them for resale and help with pricing.”
“There are many friction points in ticketing,” Adler continued, “and high-tech ways in which players in the system try to monopolize every dollar spent on ticketing and prevent resale of tickets. For more than half of the events there are lower-cost options on the secondary market, and some in the primary market don't like to see tickets they previously sold offered for resale at deep discounts. Artists, venues and ticket promoters use technology every day to create a false scarcity and trick consumers into paying higher prices, while really, secretly holding back tickets to slowly drop in sales over time for to deceive and trick the fan. This is likely an illegal deceptive marketing and advertising practice driven by artists, venues and major ticketing companies that the FTC should investigate immediately.”
Adler notes that NATB “sponsored the passage of the BOTS Act in 2016, as we fully support banning bots. There is no place in the system for illegal use of bots. We support resale the right way and strong laws to protect fans and competition across the ticketing industry. If any exhibitor offered technology that violates the BOTS Act, we want to know as they will not be welcome back.”
Since its passage in 2017, the BOTs Act has only been enforced once, in 2021, when three New York-based ticket brokers were charged with violating the law. The government's enforcement of the BOTS law was an “absolute failure” writes songwriter and music industry analyst Chris Castlenoting that StubHub's planned IPO this fall was a telltale sign that the BOTS Act was “under-enforced.”
“Let's face it – if it weren't for bots and boiler rooms, StubHub probably wouldn't be much of a business,” Castle wrote. Legislators included Senator Marsha Blackburn (R-Tenn.) have introduced legislation such as the Mitigating Automated Internet Networks for (MAIN) Event Ticketing Act of 2023, which would force ticketing companies to be more proactive in reporting BOT use, but these efforts have largely stalled in Congress.
NITO's letter includes eight recommendations for rights holders and the FTC, asking the regulator to subpoena the customer lists of “companies that offer services that fall into categories that may facilitate violations of the BOTS Act” as well as increased enforcement actions, giving prioritizing “research into large-scaling ticket resale operations, focusing on those that use multiple technologies to bypass purchasing boundaries.”
By implementing these recommendations, the letter explains, “rights holders and the FTC can take important steps to curb violations of the BOTS Act and ensure fairer access to event tickets for consumers.”
from our partners at https://www.billboard.com/pro/ftc-letter-investigate-ticket-scalping-tech-world-ticket-summit/