Thousands of Bruce Springsteen fans will receive refunds for what the U.S. Federal Trade Commission called deceptive sales practices by TicketsNow, a ticket reselling unit of Ticketmaster, the FTC said on Thursday.
The FTC said Ticketmaster, which is now part of Live Nation Entertainment Inc, will repay fans "upward of a million dollars" in refunds after it used "deceptive bait-and-switch tactics" to sell tickets at 14 Springsteen concerts last year.
The FTC was inundated with complaints last year when people trying to buy Springsteen tickets from Ticketmaster were redirected to TicketsNow, at prices that were as much as three or four times face value.
FTC Chairman Jon Leibowitz told reporters on a conference call that the investigation into the practices of the ticket reselling due to the Springsteen complaints had uncovered "pretty shocking" practices.
One such practice was that TicketsNow sold "phantom tickets" without telling the consumers they did not actually have the tickets, but were hoping to get them.
The FTC said TicketsNow was also not fully refunding fans for the premium-priced tickets it could not deliver.
In connection with the settlement, the FTC sent letters to all major ticket resellers on Thursday demanding better transparency in dealing with fans.
"Clearly consumers deserve better," said Leibowitz in a statement. "They deserve to know what they're buying, including the risk that their tickets won't materialize."
The Springsteen uproar erupted last February, just days before Ticketmaster announced its plans to merge with Live Nation, the world's largest concert promoter.
Ticket reselling was criticized by Springsteen, politicians such as Representative Bill Pascrell of New Jersey and legions of music fans commenting in Internet chat rooms.
The public relations black eye threatened to undermine the Ticketmaster/Live Nation merger, which was eventually approved in January, 11 months later.
"The FTC did exactly what the U.S. Department of Justice failed to do in its approval of the Ticketmaster-Live Nation merger -- put the rights of American consumers first," said Rep. Pascrell in a statement.
The FTC's Leibowitz said Ticketmaster has not admitted to any wrongdoing as part of the settlement.
Live Nation Entertainment issued a statement saying it is now ready to "move forward" after the settlement.
"We are gratified that the FTC found that Ticketmaster did not engage in any inappropriate transfer or diversion of tickets to TicketsNow or any other resale entity," Live Nation said.
(Reporting by Yinka Adegoke; editing by Andre Grenon and Gerald E. McCormick)
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