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Will Congress Regulate Tickets After Contentious Hearing?

United States Capitol Building
Mark Tenally/AP/Shutterstock

United States Capitol Building

Members of the House Energy and Commerce Committee narrowed in on long-standing complaints about the ticketing business Wednesday.

Members of Congress expressed growing skepticism that the world's largest ticketing companies could regulate themselves in lieu of legislation during a contentious hearing Wednesday on Capitol Hill.

During the hearing, which included a half-dozen ticketing executives undergoing intense questioning, Chair of the House Energy and Commerce Committee’s Oversight and Investigations panel Diana DeGette (D-CO) said she wanted ticketing executives "to explain why they wait until the very end of the buying process to pile on fees instead of providing the total price up front."

From misleading websites to holdbacks and ongoing concerns about the transferability of tickets, members of the powerful subcommittee asked pointed and direct questions of executives and called out a number of practices that are the subject of frequent consumer complaints.

“We need to know why primary market sellers refuse to inform consumers about how many tickets are actually on sale” said House Energy and Commerce Committee Chair Frank Pallone (D-NJ) in his opening remarks. He also said he wanted to know “how many tickets are being held back for industry insiders, reserved for pre-sales, or placed directly on the secondary market at a higher price.”

He continued, “We need to know what additional disclosures are needed to protect consumers from potential deception or outright fraud by white label websites and the sale of speculative tickets,” adding, “and, finally, we need to know why hurdles and restrictions continue to be put into place for those looking to transfer tickets."

Executives like Ticketmaster president Amy Howe and Stubhub general counsel Stephanie Burns often debated the direction federal legislation like Rep. Bill Pascrell (D-NJ) and Pallone’s BOSS ACT should take to adequately protect consumers.

“Today’s groundbreaking hearing has helped to expose the utter lack of transparency and even corruption rampant in the live events ticketing industry,” Pascrell said in a statement after the hearing. Pascrell and Palone’s bill would ban the “endless conga line of deceptive practices, hidden fees, add-ons, and gimmicks created by the ticketing industry.”

Howe told Rep. Jan Schakowsky (D-Ill) that more needed to be done to combat the use of ticket bots to buy up tickets, while Burns joined representatives at Vivid Seats and TicketNetwork to challenge the increasing use of digital technology to control the life cycle of tickets and the ability of fans to transfer ticket ownership to resellers. Burns said Ticketmaster’s SafeTix hurts competition and called Ticketmasters argument that it and parent company Live Nation are simply trying to protect artist wishes “a smokescreen to justify a practice that is designed to limit consumer choice and thwart competition, which only serves to harm consumers.”

Ticketmaster isn’t opposed to resale, Howe explained, but said the company was opposed to “unscrupulous professional resellers” use “bots and other unfair practices” and called for bans on speculative tickets, deceptive websites and drip pricing. She also said that Congress should strengthen the BOTS ACT from 2016 that banned the use of automated software to buy up tickets.

Bots are not the only reason fans have difficulty finding tickets, Burns argued, saying that a lack of transparency over how many tickets are offered to a fan during a general sale and how many are held back for presales and music industry holds creates a false sense of supply. Vivid Seats vp legal affairs Ryan Fitts testified that holdbacks force consumers to make a decision in a high pressure situation when key information such as the amount of tickets available is being withheld from them. Rep. Paul Tonko (D-NY) asked whether making ticket availability information transparent would increase bots, but Burns said she didn’t buy that argument.

‘”The purpose of the holdback is to create a scarcity of supply,” said Burns. “As tickets are trickled out over time, they are designed to maintain prices or increase prices near the event.”

Of course Stubhub and Vivid Seats have their own transparency problems, especially in sports where large scale brokers work with teams to cancel contracts of longtime brokers and buy up nearly all unsold ticketing inventory, using their ownership positions to essentially create artificial price floors which some industry analysts have said are similar to price-fixing.

The hearing also included a chance for AXS chief executive Bryan Perez to tee off on Live Nation, his top competitor, although he largely chose not to take the bait. When asked by Rep. Yvette Clarke (D-NY), if he was aware of Live Nation retaliating against venues for not using Ticketmaster, a charge that was the recent subject of a Department of Justice investigation and settlement, he said “I have not heard it." He added, "The threat has not been made to me personally. I do know people who have had comments made to them.”

Howe pointed out to committee members that Ticketmaster has agreed to extend the consent decrees and accept new restrictions and guidelines for navigating issues related to the 2010 consent decree which was supposed to prevent Live Nation from leveraging content to grow its ticketing business.

The new settlement “would take this issue off the table” Howe said. Going forward, she continued, “We will compete on our own innovation.”


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