Two members of the U.S. House of Representatives have reintroduced a federal ticket resale bill that would protect consumers and the secondary ticket market by prohibiting restrictive paperless tickets and stopping ticket issuers from punishing people if they decide to resell their tickets.
HR950, co-sponsored by Democratic Rep. Jim Matheson of Utah and Republican Rep. Lee Terry of Nebraska, calls for “applying free market principles” to the secondary ticket market to “encourage a robust competitive marketplace.” The bill has been referred to the House Energy and Commerce Committee, but when it will be discussed is not known.
“Consumers are losing the ability to transfer tickets that they have purchased in a legal way,” Matheson said in a statement; the bill is referred to as the Ticket Act of 2011. “The system is being rigged against the individual fan when it comes to the secondary market. My bill addresses that problem.”
The bill states that Congress believes:
(1) Sponsors and promoters of major music, sporting, and theatrical events are increasingly seeking to control the resale of tickets to such events in the secondary market, by employing restrictive State laws, imposing and enforcing onerous contractual or license terms, and imposing technological barriers on ticket resale.
(2) Such restrictions and downstream controls substantially impede interstate commerce in event tickets, drive up ticket prices, reduce availability of tickets to interested purchasers, narrow the choices available to the public, and are unfair to consumers.
(3) Eliminating such restrictions and applying free market principles to the secondary market in event tickets would encourage a robust competitive marketplace in such tickets, would promote the healthy growth of electronic commerce in such tickets in online marketplaces, and would be in the best interests of ticket purchasers, fans, and the general public.
(4) Purchasers of event tickets, whether in the primary or secondary ticket markets, are entitled to minimum consumer protection standards, including provisions for full refunds of ticket purchases in appropriate circumstances.
(5) In order to achieve a nationwide free market in resale of event tickets, Congress must act to preempt State or local laws that unjustifiably restrict such resales, while preserving State and local authority to legislate or regulate to prevent fraud, maintain public order, or vindicate other legitimate State and local interests.
As such, the proposed law prohibits any ticket issuer from restricting “the resale or offering for resale of an event ticket by a lawful possessor thereof.”
Among other things, the bill also prohibits the inclusion of terms or conditions that restrict future resale when a ticket is bought initially; prohibits ticket issuers from limiting the channels through which someone can resell their tickets; prohibits ticket issuers from bringing legal action, or otherwise punishing, someone who resells a ticket the issuer provided; prohibits the use of restrictive paperless tickets that are not transferable; and prohibits ticket issuers from setting floors or ceilings on how much someone can charge for a resold ticket.
“Too often, concert promoters and artists view secondary ticket sales as the source for even greater revenue gains. Business insiders have conceded that the secondary market system is broken and something needs to change for the benefit of ordinary individual fans. My bill offers what I believe are important consumer protections for the average person,” Matheson said in a statement. The proposal requires both primary and secondary ticket sellers to offer ticket buyers basic consumer protections, such as refunds and physical or internet-based marketplaces. People reselling less than 25 tickets per year would be exempt.
The federal proposal joins similar bills introduced in Connecticut, Minnesota and North Carolina, but it carries some of the strongest language to protect consumers and preserve the secondary ticket market. The Matheson/Terry bill does not pre-empt existing state or local anti-scalping laws.
In Congress, Democratic Rep. Bill Pascrell, Jr. launched a similar ticketing bill in 2009, and this past fall he said he plans to reintroduce it in the new congress this year, but he has not yet done so. A spokesperson for Pascrell did not immediately return a message seeking comment.