Stressing that the agreement will usher in a new era of transparency in the secondary ticket industry, the Federal Trade Commission (FTC) today announced it reached a settlement with Ticketmaster that will offer refunds to Bruce Springsteen fans who fell for “deceptive bait-and-switch tactics” when they bought tickets from the company’s TicketsNow resale subsidiary.
FTC Chairman Jon Leibowitz made the announcement during a press conference, and he said that in addition to refunds, Ticketmaster has also agreed to alter its business practices to better disclose where tickets are being sold from, and whether tickets are actually in-hand or speculative.
“Buying tickets should not be a game of chance. Ticketmaster’s refrain is that it sold through TicketsNow to give consumers more choices. But when you steer consumers to your resale Web sites without clear disclosures, and they unknowingly buy tickets at higher prices, they’ll be left with a sour note,” Leibowitz said in a statement. He added that Ticketmaster is not admitting to any wrongdoing as a condition of the settlement.
Fans who were redirected from Ticketmaster’s Web site to the TicketsNow site where they bought tickets at a premium for 14 Springsteen concerts last year are eligible for the refunds, which will pay the difference between face value of the tickets and the above-face premium amount they paid. Two separate shows in New Jersey were the subject of another, yet similar, settlement between Ticketmaster and former New Jersey Attorney General Anne Milgram. While he did not know exactly how many fans were ultimately affected, in part because some fans have already been paid refunds, Leibowitz estimated that thousands could still receive refunds that could cost the company a total of more than $1 million.
In addition, the settlement calls for Ticketmaster to clearly state where tickets are being purchased from, and whether tickets are “in-hand” or are speculative. Leibowitz said about 10 major ticket resale sites will be sent warning letters today to make similar changes to their sites, but he stopped short of condemning the secondary ticket market, instead opting to praise it as providing a service to consumers.
“There’s nothing wrong with ticket resellers,” Leibowitz said, adding that he has bought tickets from brokers on numerous occasions. “We want to make sure that consumers understand what they’re buying.”
Leibowitz did not disclose the 10 resellers that will receive letters, but that group will likely include StubHub, RazorGator and TicketNews’ parent company TicketNetwork.
A spokesperson for Live Nation Entertainment, Ticketmaster’s new home since its merger with Live Nation, said the company did not have a comment about the settlement.
“At last, the federal government is siding with American consumers, who are the real winners in this settlement,” said U.S. Rep. Bill Pascrell, Jr., who was cited by Leibowitz as one of the members of congress, with Sen. Charles Schumer, who has worked to regulate the ticketing industry. “I applaud FTC Chairman Jon Leibowitz for responding to my call for a full investigation and for recognizing that this issue is bigger than who gets the best seats at a show. It’s about how we do business in the United States.”
Pascrell added, “The FTC did exactly what the U.S. Department of Justice failed to do in its approval of the Ticketmaster-Live Nation merger: put the rights of American consumers first. This decision provides for a remedy I strongly support: forcing Ticketmaster to refund money to the concert goers that were swindled. Additionally, the FTC will require TicketsNow and Ticketmaster to operate more transparently in the future by requiring clear and conspicuous disclosure that TicketsNow is a secondary marketplace, that ticket prices are often higher than their face value, and individual disclosure when speculative tickets are advertised. These requirements are similar to many provisions of the BOSS ACT, which I introduced last year in response to Ticketmaster’s behavior in this incident. While this order will undoubtedly force the secondary market to change many of its bad behaviors, I’d like to see the consumer protections in this settlement and the additional ones in my legislation given the full force of law. Congress must immediately pass the BOSS ACT so incidents like what happened at the Meadowlands last year never happen to concertgoers in the future.”
Last Updated on February 19, 2010
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The issue here is not the secondary market, it is the primary market’s manipulation of both the primary and secondary market so the consumer cannot easily tell the difference between the two. If a buyer goes on eBay or StubHub and buys two Springsteen tickets, they are likely to know they are paying a markup. When they go on Ticketmaster, they expect to be buying them at face value from the primary ticket vendor. When the primary vendor blurs the line between them and the secondary market, you get what happened here, and that is the fault of the primary vendor for blurring that line, not the secondary market for functioning as it is supposed to.
And let’s be very clear…Ticketmaster made those decisions to steer customers to TicketsNow, but then tried to make it seem like they knew nothing of the matter… Someone should starting asking the right questions about Ticketmaster, instead of trying to blame the secondary market!!!
TM should not be allowed to have a resale site because they are a primary distributor of tix to begin with. For the simple fact that they have an opportunity to pull what they did should disqualify them from this marker, period. It falls under the same theory as double dipping, getting 2 bites for the price of one etc. If you ask me, they got off easy, its like being caught stealing and only having to return what you stole. When does the requirement to operate transparently begin? Theres no real penalty for them ‘swindling’ the public
I am fascinated at all the drama around TicketsNow and how confused fans were with the links, or the secondary market is, with this settlement. For the last ten years, Ticketmaster has run TicketExchange and even right now gives fans the option to buy resold tickets not all that differently than how they had the TicketsNow links set up. Fans buy or don’t buy. No one seems to notice or care. I can only come to one of two conclusions – either there is a magic stealth blanket around TicketExchange and I am the only one who can see it, or the TicketsNow situation wasn’t that big a deal despite all the grandstanding and handwringing.
all that ticketmaster did was redirect people to ticketsnow instead of offering people a link to ticketsnow they didn’t actually do a bait and switch (sell one product then give a person another). All this over automatic redirection instead of a big link saying “click here for premium tickets”. Pretty crazy if you ask me…the so called fooled customers had to look through rows and rows of seats on ticketsnow add them to their shopping cart, enter their billing address and then click check boxes saying they agree to the order which before they agreed showed them a much higher price than what would of been on ticketmaster….It would be like if you went to Sears and they said sorry we don’t have anymore $20 shirts left and then a rep ushers you directly to the premium department at say Saks fifth avenue where you then perused shirts and bought a $200 one at the register. After leaving the store you suddenly said hey i just got fooled into buying a $20 shirt! Thats not a bait and switch…i’m sorry
I hear what you’re saying, and quite honest I’m surprised DOJ didn’t make Ticketmaster’s removal from the secondary market a requirement of the merger. That being said, I do not think there is anything fundamentally wrong with Ticketmaster having interests in the secondary market if they conduct themselves ethically, which they have not. It would be like telling GM they could not sell used cars because they already sell new ones.
Your analogy is flawed; it should properly read as follows.
You went to the Sears store to select and buy a shirt at Sears’ price.
The clerk led you you a department where shirts were being sold, whereupon you selected a $200 shirt. What the clerk failed to divulge was that that particular department was sub-let to Saks, was not the department which sold shirts at the regular Sears prices, but one which sold Sears shirts at higher prices.
That is indeed bait-and-switch.