Ticketmaster, the world's largest online box office, is promising to crack down for the first time on industrial scale scalpers and stop them from using hundreds and sometimes thousands of fake Ticketmaster accounts to buy and resell tickets to concerts, theaters and sporting events.
The move, announced in a letter to US lawmakers late last week, comes after the US Federal Trade Commission filed a lawsuit in September. The multimillion-dollar lawsuit accuses Ticketmaster and its parent company LiveNation of “illegal ticket resale tactics” and “deceiving artists and consumers regarding ticket prices and restrictions.”
Details of the letter were first published by American music and entertainment magazine Billboard.
For years, fans trying to log onto Ticketmaster to buy their allotted maximum of four or six tickets to see their favorite artists have fumed over their inability to buy seats at face value directly from the box office, watching as speculators and resellers scooped up the majority of tickets to popular events only to post them on resale sites at huge markups.
The Federal Trade Commission acknowledges that its lawsuit is largely based on revelations from a 2018 CBC News/Toronto Star investigation in which reporters went undercover posing as “ticket brokers” and exposed how Ticketmaster recruited mass scalpers and knowingly allowed them to operate hundreds of fake accounts. to bypass restrictions on ticket purchases.
WATCH | The National: Inside Ticketmaster's Secret Scalper Program (2018):
Ticketmaster calls the FTC's lawsuit a “distorted view of the facts and the law” and plans to fight the claims in court, but acknowledges that “ticket brokers” using fictitious names, fake IP addresses and bots to maintain large numbers of fake ticket purchasing accounts have become an industry standard.
“It is true that ticket brokers are allowed to have multiple accounts; calling it a conspiracy is misleading,” Daniel M. Wall, executive vice president of corporate and regulatory affairs at Live Nation, wrote in an Oct. 17 letter to U.S. Sens. Marsha Blackburn and Ben Ray Luján, who are leading a bipartisan campaign for fairer ticket sales in the United States.
The FTC's lawsuit uncovered internal Ticketmaster documents showing, for example, that in 2018, five brokers controlled 6,345 Ticketmaster accounts and held 246,407 concert tickets for 2,594 events.
“Of course, the situation has gotten out of control, especially since scalpers developed automated tools to create Ticketmaster accounts,” Live Nation wrote to US lawmakers. “Given the level of abuse we are now seeing, we will no longer allow this to happen. It's unfair to artists and fans, and it's time to do something about it.”
As of October 17, Ticketmaster promises to limit everyone, including brokers, to one Ticketmaster account and use advanced AI security checks to detect fraud.
“Extra accounts will be canceled in due course,” the company said.
In a letter to US lawmakers, Ticketmaster also announced that it is shutting down part of its TradeDesk platform, inventory management software for ticket resellers, and will no longer allow bulk resale of concert tickets (though the company indicates that bulk resale of tickets for sporting events and theaters may still be permitted).
“We have concluded that the reputational harm to Ticketmaster from having to explain and defend TradeDesk outweighs its value. While we believe this criticism is unfair, we are removing TradeDesk's concert ticket management functionality from the market,” the Live Nation executive wrote.
Undercover reporters documented the conspiracy
While news of Ticketmaster's promised crackdown may be music to the ears of the Federal Trade Commission and US politicians, a CBC/Toronto Star exposé in 2018 revealed the extent to which the company has historically collaborated with and profited from scalpers.
The reporters went undercover, using hidden cameras, posing as small-time ticket brokers to ask Ticketmaster officials to help them set up a profitable resale business.
At an exhibition booth set up at the International Ticket Brokers Conference in Las Vegas, ticketmaster openly recruited mass scalpers, promoted TradeDesk and offered to help them manage and resell huge inventories of tickets to fans, knowing full well that the scalpers were using fake accounts to purchase tickets.
At one point, an undercover CBC reporter said, “I want to know if Ticketmaster will police us on our multiple accounts.”
“No,” said a Ticketmaster representative. “I have a gentleman who has over 200 accounts on Ticketmaster.com.” The representative then noted that the company has an “auto-sync feature.”
“If you have 100 Ticketmaster.com accounts, you buy, buy inventory, the system automatically syncs them and moves them to create [resale] listing”.
“How many brokers use multiple accounts?” – asked CBK.
“I’d say pretty darn close to every single one of them,” the rep said. “I can’t think of one of my clients who doesn’t use multiple accounts.”
CBC News posed as a ticket broker off-site for a second time and hosted an online demonstration of the product from a TradeDesk representative, who confirmed that Ticketmaster would turn a blind eye to the use of multiple fake accounts.
A CBC reporter asked, “If I use multiple Ticketmaster accounts to purchase tickets, can TradeDesk stop me from trying to sell them?”
“No,” a TradeDesk representative said. “The last thing we want to do—we've spent millions of dollars on this tool—so the last thing we want to do is, you know, force brokers into a place where they can't sell products from us.”
“So you're not trying to track down people who, you know, use multiple identities to purchase tickets?” – asked CBK.
“No, not at all,” the salesman told TradeDesk.
Following the initial CBC stories in 2018, Ticketmaster said it was considering cracking down on scalpers using fake accounts to scam ticket purchase restrictions.
But in its Oct. 17 letter to U.S. senators, Live Nation/Ticketmaster said the company feared the crackdown at the time would “simply cause brokers to avoid Ticketmaster and post on other marketplaces.”
But now, facing a multimillion-dollar lawsuit from the U.S. government and a potential injunction that could force the company to shutter much of its reseller operations, Ticketmaster is promising change.
