United States Senators Jerry Moran (R-Kan.) and Richard Blumenthal (D-Conn.) have composed a letter with several questions for Live Nation Entertainment CEO Michael Rapino in the wake of last week’s CBC/Toronto Star reporting Ticketmaster resale practices. The chairman and ranking member of the U.S. Senate Commerce Subcommittee on Consumer Protection Product Safety, Insurance and Data Security, respectively, questioned Rapino regarding the company’s operation as both primary ticketing platform and resale marketplace and whether or not its practices are in the best interests of consumers.
“CBC News reported that Ticketmaster . . . recruits and employs professional ticket scalpers to circumvent the ticket purchasing limits on its own primary ticket sales platform in an effort to expand its ticket resale division,” the senators wrote. “According to the article, Ticketmaster utilizes a professional reseller program called TradeDesk, which provides a web-based inventory for scalpers to effectively purchase large quantities of tickets from Ticketmaster’s primary ticket sales website and resell these tickets for higher prices on its own resale platform.”
“Citing examples of TradeDesk users moving up to several million tickets per year, the allegations of the harms to consumers made in this piece are serious and deserve immediate attention,” the senators continued.
Sen. Moran sponsored the 2016 Better Online Ticket Sales (BOTS) Act, which was co-sponsored by Blumenthal. That legislation prohibits the circumvention of ticket purchasing limits and authorizes the Federal Trade Commission to take enforcement action.
The reporting by the CBC and Toronto Star investigated Ticketmaster’s processes in selling tickets, both on the primary and secondary markets. It found via extensive analysis of one Bruno Mars show in Alberta that ticket prices were often pushed upwards by practices including the slow release of primary inventory, which induces a concept of scarcity that may not exist, as well as price-hikes occurring within hours of tickets going on sale to meet market demand.
Another report found a Ticketmaster resale employee assuring an undercover reporter at the Ticket Summit convention in Las Vegas that the company does nothing to fight back against ticket brokers going around per-ticket limits during primary sales.
Ticketmaster strongly denied its resale department was enabling professional “scalping” as characterized in the report, while promising an internal review of its policies. Despite their assurances that all is on the up and up, Ticketmaster has already been targeted by class-action lawyers in both the United States and Canada over their operations.
Government officials north of the border have also taken notice in the wake of the reports. Navdeep Bains, federal minister of innovation, science and economic development, told the CBC he is looking into the company’s practices and wants to make sure consumers are treated fairly.
“We want to make sure that consumers are protected,” he said. “And so we’re going to look into this and find out what are the next steps to address this issue in a meaningful way.”
No formal investigation is currently underway in Canada.
In the United States, where Live Nation has its corporate headquarters in Beverly Hills, California, a series of questions posed by Senators Moran and Blumenthal appear to be the only official inquiry at this point. Specifically, the following questions were posed to Rapino:
- Describe the event ticket purchasing limits that Ticketmaster currently employs for sales on its primary ticket sales platform. Additionally, how does the company identify computer programs used to circumvent these purchasing limits?
- Do Ticketmaster’s ticket purchasing limits and associated detection practices apply to users of its online program, TradeDesk? If not, please explain.
- What are the specific rules and processes of compliance for participating TradeDesk users as it relates to ticket purchasing limits and other relevant consumer protection priorities? Please share any documents and guidance materials that are provided to TradeDesk users.
- What role does Ticketmaster’s Professional Reseller Handbook play in deterring its resellers from engaging in illegal ticket purchasing activities?
The letter, dated September 21, 2018, requests a written response as soon as possible, but no later than 5 p.m. on October 5, 2018. The full letter is available here.