The American Antitrust Institute (AAI) has officially joined the fight against paperless ticketing.
On Friday, January 20, the Washington, DC-based advocacy organization presented the U.S. Federal Trade Commission and several state attorneys general with a 71-page white paper authored by James D. Hurwitz.
The message of Hurwitz’s paper was clear: The government needs to sponsor an investigation into restrictive paperless tickets.
Hurwitz’s now-public work concludes that paperless tickets may violate federal and state consumer protection and antitrust laws. The paper argues that transfer restraints on paperless tickets “unjustifiably limit consumer choice and depart from bedrock competitive market principles.”
Restrictive paperless tickets require ticket buyers to present the credit card used in the original ticket transaction and a matching photo ID to gain entry on the day of the event.
While paperless ticketing is marketed to consumers as both a convenience and a protection, paperless tickets may also restrict consumers. Because a ticket buyer must be present at the date and time of a paperless event, the process of gifting or reselling tickets becomes complicated.
The secondary market has criticized restrictive paperless ticketing as stifling competition. Because of the transfer restrictions placed on paperless tickets, these tickets cannot easily be sold through popular secondary-market sellers, such as StubHub or TicketsNow.
Some primary ticketers further restrict their paperless tickets by only allowing transfers within their own ticketing environments or Web sites. These sites can prohibit sales below face value, set a maximum sale price, or charge a fee for the transfer.
Of course, there are positive aspects to paperless ticketing. Primary ticket sellers defend the practice as a safeguard against ticket scalping, bulk purchasing by software bots, and the sale of stolen, counterfeit, or lost tickets.
Ultimately Hurwitz’s white paper is a call to action to a number of public servants and agencies, to whom it was addressed, and an opportunity to bring attention to the issue of restrictive paperless ticketing. Hurwitz previously authored an AAI white paper about the Ticketmaster/Live Nation merger in spring 2009.
Prior to the document’s release, a handful of states had already discussed or passed legislation regulating paperless ticketing. This latest development could kick start similar legislation in other states.