Senators Richard Blumenthal (D-CT) and Sheldon Whitehouse (D-RI) introduced new federal legislation this week that could have significant impact on how ticketing works across the United States. The “Junk Fee Prevention Act” proposes to eliminate excessive hidden and unnecessary fees imposed on consumers.
Beyond requiring transparency on fees across multiple industries, the act also would require transparency on both ticket holdbacks and “speculative” ticketing across the country.
“Concealed surprise fees—nickel and diming Americans to distraction—must be stopped,” said Blumenthal. “Airline travel, concert going, common purchases—seemingly almost everywhere— consumers are compelled to pay hidden excessive charges. Our bill will help end this price gouging—forcing full disclosure upfront and restricting abusive fees. It will mandate basic common sense fairness and transparency, which consumers rightly demand and deserve.”
“Consumers are charged hidden fees when purchasing everything from flights to concert tickets,” said Whitehouse. “Our Junk Fee Prevention Act would provide consumers with the transparency they deserve when making a purchase.”
“Junk fees” have been a priority of the Biden administration through the past several months, as they have ratcheted up rhetoric against the practices, which they say inflate prices unfairly for consumers and prevent comparison shopping. The White House held a roundtable discussing reform efforts and the economic case for them this week, with StubHub’s Laura Dooley advocating for national reform.
Should it be passed, the consumer landscape for ticketing would be dramatically different, with consumers able to better understand exactly how much tickets will actually cost across different marketplaces. As-is, with many ticketing platforms displaying one price only to add significant fees at the end of the transaction, make it near-impossible to understand where the best price for tickets might be without a major investment of time on the part of the consumer shopping for tickets.
Even more dramatic would be the imposition of holdback transparency. Currently, huge percentages of tickets are not actually offered for sale to the general public, instead set aside for various affinity groups, or simply kept back to keep supply at a perceived low amount to justify price surging systems like “dynamic” and “platinum” tickets. A 2016 report by the New York Attorney General’s office found that more than 50% of tickets to concerts were held back from general sale, with many concerts seeing far higher percentages – an audit by the Honolulu, Hawaii government in 2020 showed one concert that had a whopping 93% of tickets held back.
Consumer advocates have long pushed for more transparency on holdbacks, but promoters and the robust Live Nation lobby have fought hard against previous efforts by lawmakers to legislate such transparency. In Ontario, transparency on holdbacks was dropped from ticketing reform plans after tour operators threatened to simply avoid the province – the most populace in the country – rather than disclose how many tickets were being held back from shows there.
Consumer advocates have spoken in favor of the proposed legislation, with endorsements from the Consumer Federation of America, National Consumers League, and Consumer Reports, already out on its initial release.
“Business models that rely on nickel-and-dining consumers are fundamentally unfair,” said John Breyault, National Consumers League Vice President of Public Policy, Telecommunications, and Fraud. “Hidden junk fees also harm honest businesses by making their competitors’ products and services look deceptively cheaper. The Junk Fee Prevention Act is a long-overdue solution that will help consumers keep more money in their pockets and promote competition in the marketplace.”
It is all but certain that the live entertainment lobby, particularly Live Nation Entertainment and Ticketmaster, will fight hard against the holdback provision in the bill. Live Nation has attempted to push back against calls for greater regulation of its sprawling power in the business by blaming ticket resale for all consumer issues in ticketing, and proposed its own set of legislative priorities – ones that conveniently allow it and its clients to effectively become the regulators of the secondary ticketing market.
AEG has been active as well on the legislative front, but has zagged against Live Nation’s push, instead reportedly working with legislators in an effort to encourage regulations against the exclusive ticketing contracts that have helped Live Nation become so dominant in the U.S. marketplace.
The full text of the legislation is available here.
Last Updated on March 24, 2023 by Dave Clark