FTC Buys Admission to Online Ticket Sale Workshop

Advertising Law

After being forced to reschedule due to a government shutdown, the Federal Trade Commission (FTC) held a workshop about online ticket sales.

“That’s the Ticket” explored consumer protection issues regarding the online sale of concert and sporting event tickets. The issues included practices that limit ticket availability on the primary market, messages that mislead consumers about ticket prices or availability, and statements designed to confuse consumers about the entity from which they are purchasing.

In her welcoming remarks, FTC Commissioner Rebecca K. Slaughter said the $10 billion online ticket industry is a priority for the agency, which has an “interest in promoting a competitively functional and consumer-friendly marketplace for event tickets.”

Panel presentations at the event began with a discussion of bots and the Better Online Ticket Sales (BOTS) Act. The 2016 statute is designed to combat the use of bots, which allow buyers to manipulate ticketing platforms in order to hold and buy large volumes of tickets, leaving consumers with no alternative but to purchase tickets from resellers at a markup.

While both the FTC and state attorneys general have enforcement authority under the BOTS Act, panelists indicated that the statute has had a limited effect due to low numbers of enforcement actions, and that many primary sellers have leveraged technology in order to combat bots, panelists shared.

Another hot topic for attendees: the adequacy of ticket price and fee disclosures.

In her remarks, Commissioner Slaughter noted that the agency hears complaints from both consumers and congressional leaders about the masking of event ticket prices, with service fees or other fees often being revealed only late in the transaction and displayed in a significantly smaller font than the ticket prices. Such fees are not insignificant and can be as high as 30 percent of the total ticket price.

This use of “drip” pricing poses consumer protection issues, National Advertising Division Director Laura Brett explained. Because the sizable fees are material to a consumer’s purchasing decision, they should appear at the beginning of an “all-in” pricing model that discloses all taxes, fees and charges at the time the consumer first views the ticket price, she said.

Last year, the self-regulatory body referred StubHub to the FTC over its use of drip pricing.

Industry members noted that without some form of regulatory oversight, ticket platforms have no incentive to switch from the drip to an all-in pricing model without risking being the sole outlier and losing customers.

Other panels addressed consumer protection issues surrounding ticket availability—including fan club and credit card presales, dynamic pricing, different digital ticketing models, and mechanisms to manage, limit or expand the transfer of tickets—as well as consumer confusion about from what site and from whom tickets are actually purchased.

To read more about the workshop and watch video of the event, click here.

Why it matters: Commissioner Slaughter issued a warning to the ticketing industry in her remarks, calling on stakeholders to allow consumers to comparison-shop for the all-in cost of tickets to live entertainment. “[I]f industry doesn’t step up to address this problem with its own collective solution, then I believe that the government must explore a law enforcement or regulatory solution,” she said. “[C]onsumer frustration with opaque and deceptive ticket pricing has passed its boiling point. Consider yourselves on notice.”