Stressing that the agreement will usher in a new era of transparency in the secondary ticket industry, the Federal Trade Commission (FTC) today announced it reached a settlement with Ticketmaster that will offer refunds to Bruce Springsteen fans who fell for “deceptive bait-and-switch tactics” when they bought tickets from the company’s TicketsNow resale subsidiary.
FTC Chairman Jon Leibowitz made the announcement during a press conference, and he said that in addition to refunds, Ticketmaster has also agreed to alter its business practices to better disclose where tickets are being sold from, and whether tickets are actually in-hand or speculative.
“Buying tickets should not be a game of chance. Ticketmaster’s refrain is that it sold through TicketsNow to give consumers more choices. But when you steer consumers to your resale Web sites without clear disclosures, and they unknowingly buy tickets at higher prices, they’ll be left with a sour note,” Leibowitz said in a statement. He added that Ticketmaster is not admitting to any wrongdoing as a condition of the settlement.
Fans who were redirected from Ticketmaster’s Web site to the TicketsNow site where they bought tickets at a premium for 14 Springsteen concerts last year are eligible for the refunds, which will pay the difference between face value of the tickets and the above-face premium amount they paid. Two separate shows in New Jersey were the subject of another, yet similar, settlement between Ticketmaster and former New Jersey Attorney General Anne Milgram. While he did not know exactly how many fans were ultimately affected, in part because some fans have already been paid refunds, Leibowitz estimated that thousands could still receive refunds that could cost the company a total of more than $1 million.
In addition, the settlement calls for Ticketmaster to clearly state where tickets are being purchased from, and whether tickets are “in-hand” or are speculative. Leibowitz said about 10 major ticket resale sites will be sent warning letters today to make similar changes to their sites, but he stopped short of condemning the secondary ticket market, instead opting to praise it as providing a service to consumers.
“There’s nothing wrong with ticket resellers,” Leibowitz said, adding that he has bought tickets from brokers on numerous occasions. “We want to make sure that consumers understand what they’re buying.”
Leibowitz did not disclose the 10 resellers that will receive letters, but that group will likely include StubHub, RazorGator and TicketNews’ parent company TicketNetwork.
A spokesperson for Live Nation Entertainment, Ticketmaster’s new home since its merger with Live Nation, said the company did not have a comment about the settlement.
“At last, the federal government is siding with American consumers, who are the real winners in this settlement,” said U.S. Rep. Bill Pascrell, Jr., who was cited by Leibowitz as one of the members of congress, with Sen. Charles Schumer, who has worked to regulate the ticketing industry. “I applaud FTC Chairman Jon Leibowitz for responding to my call for a full investigation and for recognizing that this issue is bigger than who gets the best seats at a show. It’s about how we do business in the United States.”
Pascrell added, “The FTC did exactly what the U.S. Department of Justice failed to do in its approval of the Ticketmaster-Live Nation merger: put the rights of American consumers first. This decision provides for a remedy I strongly support: forcing Ticketmaster to refund money to the concert goers that were swindled. Additionally, the FTC will require TicketsNow and Ticketmaster to operate more transparently in the future by requiring clear and conspicuous disclosure that TicketsNow is a secondary marketplace, that ticket prices are often higher than their face value, and individual disclosure when speculative tickets are advertised. These requirements are similar to many provisions of the BOSS ACT, which I introduced last year in response to Ticketmaster’s behavior in this incident. While this order will undoubtedly force the secondary market to change many of its bad behaviors, I’d like to see the consumer protections in this settlement and the additional ones in my legislation given the full force of law. Congress must immediately pass the BOSS ACT so incidents like what happened at the Meadowlands last year never happen to concertgoers in the future.”
