StubHub’s London offices were raided by investigators from the United Kingdom’s Competition and Markets Authority over the summer as part of an investigation into the secondary giants’ partnerships.
GetMeIn and Seatwave, which are subsidiaries of Ticketmaster/Live Nation (NASDAQ: LYV) were also required to turn over information related to the investigation, and did so voluntarily. StubHub, owned by eBay (NASDAQ: EBAY) and Viagogo, based in Switzerland, did not comply, leading to the raids.
The investigation is reportedly seeking data on the resale giant’s “top seller” program, which is offered to partners who make sales of a minimum of $250,000 per year on the platform.
According to The Guardian, a spokesman for the investigating agency declined comment on the specific reasons for the raids.
One of the central figures in the investigation is Canadian Julien Lavallee, one of several individuals named in the “Paradise Papers” leak of offshore financial records, released this week by the International Consortium of Investigative Journalists. A ticket broker based in Quebec, Lavallee allegedly uses “bot” programs to circumvent ticket limits for top events, which he then purchases and re-sells on StubHub, Vivid Seats and Ticketmaster, according to CBC.ca. He is alleged to have appeared in investigators’ radars following massive purchasing and subsequent resale of tickets to concerts like U2, The Weeknd, Take That and more – at a rate that they say far exceeds what a human making purchases legally could do.
In the wake of the news breaking regarding these raids, Lavallee issued a statement that said, in part, that his operation “considers all its activities are in accordance with laws and regulations in jurisdictions in which it operates and sells its products.”
Critics of ticket resale point at sellers like Lavallee as a proper representation of how StubHub and the other platforms being investigated operate, as opposed to their marketing, which touts them as a fan-t0-fan throughput for tickets.
“What’s happening here is not fan-to-fan activity. It’s [scalper]-to-fan activity,” Adam Webb of the Fan Fair Alliance told CBC. “All of the platforms operate on that basis … They are active and complicit in this process.”
StubHub issued a statement pushing back against that characterization, saying that “[we hold] all sellers to a very high standard and require they follow all relevant laws.”
“StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan’s ability to fairly access, buy, resell, or even give away tickets.”