The Competition and Markets Authority (CMA) in the UK is recommending changes to the regulatory climate surrounding ticket resale, which would grant it new power to deal swiftly with individuals and platforms who violate the law.
Suggested reforms include a ban on platforms allowing ticket brokers to sell more tickets for an individual event than they can buy from the primary market; requiring platforms to be fully responsible for incorrect information about tickets listed for sale on their systems, and a licensing system for resale platforms that would allow regulators to “quickly take down websites, withdraw a business’s right to operate in the sector and impose substantial fines.”
“Over recent years, we have taken strong action to protect people buying tickets from resellers online, and the secondary ticket websites are now worlds apart from those we saw before the CMA took action,” says CMA senior director for consumer protection George Lusty. “While its clear that conserns about the sector remain, there are limits to what the CMA and other enforcers can do with their current powers. With live music and sporting events starting back up, we want the government to take action to strengthen the current laws and introduce a licensing regime for secondary ticketing platforms. If adopted, these proposals will help prevent people getting ripped off by unscrupulous resellers online and we stand ready to help the government to implement them.”
CMA has been heavily involved in the resale business in recent years, including the lenghty hold it put on the purchase of StubHub by Viagogo before the Switzerland-based company agreed to sell off the non-U.S. branches of the company. It has largely taken an anti-resale line pushed by concert industry insiders, which has led some marketplaces like Ticketmaster’s Seatwave and GetMeIn to shut down in favor of face value-capped marketplaces. Industry insiders have also launched a similar platform in Twickets, which is part-owned by Iam Mcandrew and Harry Magree, who happen to be co-founders of the Fan Fair Alliance, a public relations operation heavily involved in pushing the CMA to impose ever-harsher restrictions on websites like Viagogo and StubHub that would benefit Twickets.
The regulator notably stopped far short of suggesting that for-profit ticket resale should be banned entirely, as was recently done in Ireland. Consumers have loudly complained about the issues in face value-capped resale, which essentially force them to sell tickets they can’t use at a loss while the event organizers reap fees on both the initial and then secondary sale of the tickets – if they can be sold at all due to the imposition of price floors to keep resale tickets from being priced competitively with remaining primary market inventory as show dates approach. An outright ban on resale is widely recognized by economists as folly, due to the fact that it would encourage black markets to take over the previously legal and protected secondary market, with no consumer protections in place at all.
In their response to the CMA suggestions, StubHub and Viagogo both indicated their intentions to continue to toe the line with the regulatory climate, but suggested that the regulators also look at known consumer abuses taking place in the primary market for live events as well.
“The CMA’s report into secondary ticketing offers an interesting insight into the effectiveness of current regulation,” a Viagogo spokesperson said, before adding: “The CMA notes their report is not as a result of customer complaints and, moreover, that a ban on secondary platforms would lead to an explosion in black market sources for tickets.”
“We have argued strongly that the UK should grasp the opportunity of the COVID-19 recovery to improve the events industry and strengthen market collaboration between all players including event organisers, venues, primary and resale platforms”, Viagogo’s statement continued. “We are open to all ideas as to how that is achieved, but it must be carefully considered and focused on improving the industry’s service for customers”, it added. “There is a need to address the failings of the primary market and we need to explore the risks of new and unregulated online resale channels.”
“We have a long history of collaborating with regulators in the interests of our fans and will continue to support measures that promote a secure, transparent, and competitive ticket marketplace,” a StubHub spokesperson said. “We believe that the tools are in place today, through existing law, to protect consumers and address the potential issues highlighted by the CMA.”
“We encourage any ongoing regulatory discussions to be comprehensive,” they went on, adding that any such discussions should, “include a review of practices by primary ticket sellers that disadvantage fans such as restrictions on transferability or the way tickets are allocated for sale.”
The UK Government will now review the CMA’s report and suggstions before making any decisions on future policy changes.