Wednesday, November 29, 2023

Pennsylvania is considering ticket charges inspired by Taylor Swift

After a summer of severe sticker shock among concertgoers seeking to see megastars like Beyoncé and Taylor Swift, Pennsylvania lawmakers are considering legislation to crack down on fraudulent ticket sales practices.

But consumer advocates and the tech lobby argue that as written, the bills could strengthen Ticketmaster’s monopoly in the live events industry and hurt concertgoers’ ability to buy and sell tickets. tickets to their favorite shows on the secondary market.

A lawmaker in the state House wants to ban the use of bots to buy tickets or other products, while another representative introduced legislation that would restrict speculative ticketing, which is when a reseller sells tickets which they did not own at the time of the sale but hoped to obtain before the event.

Both bills are supported by Ticketmaster, which merged in 2010 with event promoter Live Nation amid federal scrutiny and has gained a 70% market share in the ticketing industry.

That part comes in the secondary market. According to a 2022 regulatory filing, the company handled $4.5 billion in ticket sales that year, more than double the total from 2019.

The legislation awaits consideration by the State House Consumer Protection, Technology & Utilities Committee. State Rep. Rob Matzie (D., Beaver), the committee’s chairman, told Spotlight PA that he plans to hold votes on the bills in the coming weeks as the chamber goes back into session.

“We’re not against secondary sellers,” Matzie said. “But we’re just against this part of that business model, because of what it does to consumers.”

While the globe-trotting tours of Beyoncé and Swift have lit up ticket sales, high prices amid limited supplies exist long before 2023.

A 2018 report from the US Government Accountability Office found that resale tickets can sometimes be 40% higher than the original price.

These brokers “can use more staff and software (‘bots’) to quickly buy more tickets,” a summary of the report says. “As a result, many consumers will be able to buy tickets only in the resale market at a large markup.”

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Speculative ticketing in particular has attracted attention from policymakers seeking to regulate market events. In those cases, the sale itself represents a promise of a future ticket, rather than an actual one. And if the broker can’t find a ticket, the buyer likely won’t get through the venue’s doors, concert promoters told lawmakers at a state House committee hearing in September.

“That trust in consumers that they need to buy the ticket in advance is something that our organizations have built for years, and speculative tickets undermine trust with every fraudulent transaction,” said Kerri Park, chief operating officer of Philadelphia music venue World Cafe Live.

If a reseller violates the proposed ban on speculative ticketing, a concert venue, ticket seller, promoter, or music artist would be allowed to file a lawsuit against the secondary seller.

Resale platforms like Vivid Seats and StubHub, and trade groups representing the tech industry have strongly opposed the fees.

They point to speculative ticketing ban language that defines a ticket as “subject to the terms and conditions specified” by the venue, artist, or ticket seller. These words can be used to restrict a consumer’s ability to sell a ticket if they can’t make a show, said KJ Bagchi, vice president of technology policy at the Chamber of Progress, a trade group in technology.

“The Pennsylvania bill, it uses the term speculative ticketing, but really, it’s just a way to push anti-competitive provisions under the guise of protecting consumers from fraudulent behavior,” Bagchi said. .

This stance is echoed by consumer groups. John Breyault, vice president of public policy, telecommunications, and fraud for the National Consumers League, told Spotlight PA that many ticket sales issues boil down to a lack of transparency.

When seats are sold to the general public, Ticketmaster only makes a portion of the total seats available, Breyault said. The rest — anywhere from 10% to 65%, according to the GAO — are made available as special presales for fan clubs or certain credit card holders, creating artificial scarcity. There are also fees, hidden until checkout, that increase the final price.

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Breyault said lawmakers should consider adding more pro-consumer language to their proposals, such as disclosing how many tickets are available, all prices showing fees, and protections at the level of state for refunds and transfers.

He also argued that private enforcement of the speculative ticketing bill, through civil lawsuits, gives Ticketmaster police power, which has “an incentive and ability to restrict competition.”

“If the goal is to keep consumers out of speculative ticket sales, that’s one thing,” Breyault told Spotlight PA. “If it’s designed to put the state’s thumb on the scale of competition in favor of the dominating ticket platform, then that’s the problem.”

Breyault called the bots bill’s language overly broad and said it would be difficult to enforce without requiring ticket sellers, including Ticketmaster, to report suspected bots to legal authorities.

“Ticketmaster knows who bought every ticket at every show and they can see patterns. The state attorney can’t do their job without evidence,” he said. “And if Ticketmaster has evidence, they need to bring it back.”

Pennsylvania law already has remedies for disqualified concertgoers with bad blood. A state law signed by former Democratic Gov. Ed Rendell in 2007 requires a ticket reseller to provide a full refund if a ticket “fails to conform to its description on the Internet website.”

That same law axed a requirement that only licensed resellers could offer second-hand tickets, with a markup of no more than 25% of the face value of the ticket.

Those provisions were used by Pennsylvania officials, most notably last fall to help Swift fans locked out of the Eras Tour.

The Pennsylvania Attorney General’s Office, previously controlled by Gov. Josh Shapiro, a Democrat, received more than 2,000 complaints after raising concerns about the presale of the tour on Ticketmaster.

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A month ago, after working directly with Ticketmaster, the office announced that an unknown number of fans could get another crack at tickets using their current presale code.

In an email, Brett Hambright, a spokesman for current state Attorney General Michelle Henry, said the office “regularly receives complaints from consumers affected by ticket purchases, and we investigate all for mediation options.”

“We also compile them for use in any potential investigation or litigation – as we do with all consumer complaints,” he said. The office recently took legal action against four ticket sellers.

The office, Hambright said, is aware of the pending legislation and has provided input on the speculative ticket ban. A spokesman for Shapiro did not respond to a request for comment.

Amidst national political pressure, Ticketmaster continues to make further changes. The company has lobbied for similar laws federally and in other states, and supported the effort in Pennsylvania.

“Predatory resale practices like speculative ticketing hurt fans and artists,” a Ticketmaster spokesperson said in an email. “Ticketmaster and a broad coalition of artist and venue organizations support the ban on (speculative ticketing) and many other reforms, and we’re grateful Pennsylvania policymakers are looking into it.”

While outrage over unaffordable and unusable tickets this summer has prompted many calls for greater oversight, proposed changes have stalled at the federal and state levels. A bill with similar language to the two Pennsylvania bills was vetoed by Colorado’s Democratic Governor Jared Polis in June.

While he agreed with some of the protections, Polis sided with consumer groups that argued the bill would stifle competition.

With Colorado in mind, Matzie said he introduced separate bills in hopes of getting something through both chambers and Shapiro’s desk. (In the state Senate, there is already a proposed bipartisan speculative ticket ban.)

“I want to get things done,” Matzie added.

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