FTC Sues Live Nation, Ticketmaster For Deception
• The Federal Trade Commission (FTC) and seven states have sued Live Nation and Ticketmaster for tacitly coordinating with brokers and allowing them to harvest millions of dollars worth of tickets in the primary market. Live Nation and Ticketmaster then sell the illegally harvested tickets at a substantial markup in the secondary market, causing consumers to pay significantly more than the face value of the ticket.
The FTC further alleged in a complaint that California-based Ticketmaster, LLC and its parent company, Live Nation Entertainment, Inc., deceived artists and consumers by engaging in bait-and-switch pricing through advertising lower prices for tickets than what consumers must pay to purchase tickets; deceptively claimed to impose strict limits on the number of tickets that consumers could purchase for an event, even though ticket brokers routinely and substantially exceeded those limits; and sold millions of tickets, often at much higher cost to consumers, on its resale platform that those brokers obtained in excess of artists’ ticket limits.
The FTC alleges that in public, Ticketmaster maintains that its business model is at odds with brokers that routinely exceed ticket limits. But in private, Ticketmaster acknowledged that its business model and bottom line benefit from brokers preventing ordinary Americans from purchasing tickets to the shows they want to see at the prices artists set.
Among the FTC’s allegations: 1) Despite implementing security measures, Ticketmaster is aware that brokers routinely bypass such measures by creating thousands of Ticketmaster accounts and using proxy IP addresses in order to purchase event tickets; 2) Ticketmaster nevertheless allows brokers to post these illegally obtained tickets for resale on its platform, then profits from the additional fees and markups it unilaterally adds to the resale tickets.
Despite publicly claiming that they support consumers knowing the “full cost of their tickets from the start,” company executives acknowledged internally that Ticketmaster engaged in deceptive pricing and deliberately continued that approach after internal research showed consumers were less likely to purchase tickets when they are informed of the true cost upfront.
The FTC alleges that these practices violate the FTC Act’s prohibition on deceptive acts or practices in the marketplace and the Better Online Ticket Sales Act. The FTC is seeking civil penalties against Ticketmaster and any additional monetary relief that that the court finds appropriate. The complete version of the FTC’s action is posted HERE.
