Senators Demand Answers From Ticketmaster, Live Nation After Ticket Scalping Exposé
The recent investigation into Ticketmaster’s business practices has not only led to several class-action lawsuits, but also the involvement of Capitol Hill lawmakers. Members of the U.S. Senate are demanding that the ticketer and it's owner Live Nation.
A joint investigation by the Toronto Star and CBC News pointed toward the possibility that Ticketmaster is helping scalpers resell tickets on the company’s TradeDesk platform, an accusation that Ticketmaster calls “categorically untrue.”
However, the report has led to Canada’s Merchant Law Group, which is already suing Ticketmaster and Live Nation over alleged “drip fees” on tickets, to expand its lawsuit to include the TradeDesk allegations, according to IQ magazine. Not only that, but U.S senators Jerry Moran and Richard Blumenthal of the US Senate commerce subcommittee on consumer protection, product safety, insurance and data security have asked Live Nation CEO Michael Rapino to clarify the “serious” accusations of the Star reports.
“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 said in a letter. “According to the article, Ticketmaster utilizes [sic] 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,” they added.
Questions posed to Live Nation CEO Michael Rapino include:
- 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?
Moran and Blumenthal have given until Oct. 5 to respond.
According to the CBC, Ticketmaster has declined to answer as to why it has designed an online sales tool to help resell large inventories of tickets or why it was recruiting scalpers to its “professional reseller program” at the Las Vegas conference.
Yesterday, Ticketmaster North America President Jared Smith in a blog post denied the company “has a secret program to collude with scalpers at the expense of fans,” saying reports were based on “limited understanding of a Ticketmaster product called TradeDesk.”
“Let me be absolutely clear and definitive that Ticketmaster does not have, and has never had, any program or product that helps professional resellers gain an advantage to buy tickets ahead of fans. Period,” Smith said. “We would never make anything like that, which would go against the very core of who we are and what we do. And that’s simply not what TradeDesk is.”
Smith added, He continues: “TradeDesk is Ticketmaster’s version of an inventory management tool for professional ticket resellers (brokers). It is neither secret nor unique to Ticketmaster. Like StubHub’s product called Ticket Utils or Vivid Seat’s Skybox, TradeDesk is used by brokers to manage tickets they already have. All of these tools organize a broker’s ticket inventory so the tickets can be priced and listed for sale on various ticket marketplaces, not just on Ticketmaster as was suggested. These tickets could have come from Ticketmaster, from other ticketing systems or could have been purchased directly from a team, a venue or another reseller. TradeDesk is overwhelmingly used to manage season tickets for sporting events.
“TradeDesk is not a scheme to help Ticketmaster sell tickets twice. In fact, less than 4% of the concert tickets we sell each year are listed and sold again on Ticketmaster. What does make TradeDesk unique, however, is that it offers an integration with Ticketmaster for validating tickets that are uploaded to it. As a result, our integrated marketplace is fundamentally different than all the others – safer, more transparent and where each resale ticket is clearly identified and required to be 100 percent verified before ever being listed for sale.
"as long as there is a massive disconnect between supply and demand in live event tickets, there is going to be a secondary market"
“We are aware that many people don’t believe we should be working with ticket brokers at all. But as long as there is a massive disconnect between supply and demand in live event tickets, there is going to be a secondary market. Choosing not to participate would simply push resale back to those who care less than we do about artists and fans. The reality is, engaging brokers with a safer version of tools they could get from many other ticketing companies reduces fraud across the overall ticket market.”
Smith also said Ticketmaster is “now in the process of reviewing all of our Ticketmaster accounts and expanding our review process to ensure all customers are in compliance with our terms of service”, which set out a limit on the number of tickets that can be purchased by any person, as well as prohibiting the creation of multiple accounts to get round the restrictions.
