January 30, 2023

Taylor Swift Eras Tour ticket controversy prompts lawmakers to act

When Taylor Swift announced her upcoming Eras Tour, fans knew they had to be vigilant to get tickets. But the way Swift’s exclusive ticketing partner Ticketmaster was handling the demand infuriated fans. Many fans waited for hours to buy tickets in advance, fighting glitches and bots only to come back empty-handed. Some Swifties have filed complaints and lawsuits against the company.

You have some choice words for Ticketmaster: “Look What You Made Us Do.”

After merging with Live Nation in 2010, Ticketmaster has become a popular provider of tickets for major stadium shows and blockbuster tours. But critics, including US Federal Trade Commission (FTC) Chair Lina Khan, say big companies like Ticketmaster are “too big to care.” Fans claim bots have not been prevented from buying tickets, a series of glitches that have led to site outages and cancellations, and confusing fees and prices.

In addition to fan-initiated legal action, Ticketmaster is facing investigations from federal and state lawmakers after the company failed to meet “unprecedented demand” for Eras Tour pre-sales. Attorneys general in states like Pennsylvania and Tennessee have launched investigations. A US Senate antitrust committee has announced it will hold a hearing on competition in the ticketing industry. And the US House of Representatives Committee on Energy and Commerce sent a letter to the CEO of Ticketmaster and Live Nation, raising concerns and requesting a briefing on its ticketing practices.

But the problems consumers and lawmakers have with the ticketing industry don’t start and end at Ticketmaster, according to concert industry experts. In addition to allegations of Ticketmaster’s monopolistic behavior and lack of quality service, lawmakers and consumers in general have accused ticketing companies of charging excessive fees on top of ticket prices, disguising those fees from customers, and disguising how many tickets are actually available to the fans.

To address these concerns, lawmakers have been looking for ways to make ticket sales fairer and more transparent for all major ticket sellers for years.

Early efforts resulted in the Better Online Ticket Sales Act of 2016 – or BOTS Act for short. The BOTS Act targets bots, or programs used by scalpers to grab massive amounts of tickets at once. These programs automatically fill in false customer information and resolve CAPTCHA prompts otherwise designed to deter robot purchases. Through the law, lawmakers attempted to ban the use of these bots and the sale of tickets purchased in this way, claiming that bots would force consumers to buy higher-priced tickets on the secondary market. But the FTC, which is tasked with enforcing the BOTS Act, has only initiated a single enforcement under the Act.

The BOTS Act and a patchwork of state consumer protection laws currently serve as the primary mechanisms regulating the ticketing industry in the United States. Some states are more aggressive than others, and the laws are far from uniform. For example, New York requires full upfront disclosure of ticket and service fees. Meanwhile, Michigan recently relaxed one of its laws prohibiting residents from reselling tickets.

But lawmakers everywhere seem to be acknowledging that existing mechanisms are not enough. In the years since the BOTS Act was passed, several federal agencies and members of Congress have proposed other ways to address imbalances between consumers and ticketing companies.

In 2018, the US Government Accountability Office (GAO) conducted a study to identify consumer protection issues in the ticketing industry.

In 2019, the Energy & Commerce Committee investigated the industry’s unfair practices. The committee chair and two other lawmakers then reintroduced the Better Oversight of Secondary Sales and Accountability in Concert Ticketing Act of 2019, or BOSS Act, which lawmakers originally proposed after Bruce Springsteen had a similar showdown with Ticketmaster.

More recently, the FTC held a workshop in 2019 to explore potential solutions to online ticketing issues and published a summary in 2020.

As regulators might take action against ticketing companies in the future, a look at the past—the GAO study, the proposed BOSS law, and the FTC workshop—show likely paths forward. Previous efforts have focused on primary and secondary market issues.

Primary market problems affect the ticket companies themselves. One such problem is price transparency. The 2018 GAO study found that stakeholders generally supported clear upfront disclosure of ticket fees, although opinions varied on “all-in” pricing or single-item fees. The BOSS Act would have required sellers to disclose all fees upfront and would prohibit primary ticket sellers from setting floor prices for the resale of tickets or preventing buyers from reselling them.

The FTC workshop identified backlogs as another problem plaguing consumers who struggle to find tickets at a fair price. Retentions occur when sellers reserve tickets for future sales or people associated with the venue or artist. The BOSS Act would have countered reluctance by requiring prime sellers to disclose the total number of tickets available to the public before tickets go on sale.

Aftermarket issues affect resellers. One problem is that reseller affiliations are often unclear to potential buyers. For example, GAO condemned “white label” resale sites designed to fool customers into believing they are affiliated with the artist or venue. These white label websites often pay to appear first in search results. They now charge higher fees than official websites. The BOSS Act required second sellers to obtain consent before posing as affiliated with an artist or venue.

Another transparency issue arises when actors associated with the primary seller, venue or artist enter the secondary market. The BOSS Act would have required disclosure of the relationship in these circumstances, as well as disclosure of the face value of the ticket and the time of the original purchase.

The FTC workshop also highlighted issues with bots after the BOTS Act was passed — and those concerns resurfaced after the Taylor Swift ticketing fiasco. Legislators continue to urge the FTC to begin enforcement efforts.

In addition to examining Ticketmaster’s potential monopoly power, lawmakers will likely consider other regulations aimed at primary and secondary market problems when attempting to find a solution for the industry at large. It’s evident that many lawmakers and regulators believe a fix is ​​needed to fix the “broken” ticket market.


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