NEWS: Ticketmaster Hit With U.S. Class Action Over Alleged Scalping Scheme
Ticketmaster’s allegedly deep entanglement in ticket scalping will be tested in a United States court. As previously reported, an undercover investigation published by Canada’s CBC and the Toronto Star found that Ticketmaster in that territory was apparently using its invite-only proprietary platform TradeDesk to enable resellers to buy tickets in bulk from the official Ticketmaster site, and sell them on with a substantial mark-up.
Less than two weeks after that exposé, the ticketing giant has been hit with a class action lawsuit.
Law firm Hagens Berman filed papers last Friday in California federal court on behalf of lead plaintiff Allen Lee, who is suing both Ticketmaster and its parent company Live Nation Entertainment for “unlawful and unfair business practices” that have “unjustly enriched” the ticket-seller at the expense of concert goers, Rolling Stone reports.
If accurate, Ticketmaster’s plan could affect millions of consumers, according to the complaint, which claims that the company encouraged touts to resell tickets on its platform because it collects a fee on the initial sale and on resale, a practice known as “double-dipping.”
“Have you ever wondered why Ticketmaster has been unable to rid itself of the scalpers who purchase mass quantities of concert or sports tickets from its website and then resell them for much more minutes later?” the complaint reads, according to The Hollywood Reporter. “The answer: Ticketmaster hasn’t wanted to rid itself of scalpers because, as it turns out, they have been working with them.”
In a separate statement issued last Friday, accompanying the suit, Steve Berman, managing partner and co-founder of Hagens Berman, wrote: “When you think of ticket buyers being swindled by scalpers, you likely imagine last-minute sales outside venue doors. You certainly wouldn’t assume the company selling the tickets – Ticketmaster – to be the ringleader behind massive price hikes spanning millions of tickets.” Berman’s firm is reaching out to others who bought tickets through one of Ticketmaster’s fan-to-fan resale sites to come forward.
A Ticketmaster spokesperson did not respond to a request for comment at deadline.
Just last week, U.S. senators Jerry Moran and Richard Blumenthal issued a letter to LN CEO Michael Rapino asking for clarifications about Ticketmaster’s resale services.
Written by Lars Brandle on Oct 02, 2018
# # # # #
Ticketmaster Facing Class-Action Lawsuit from Ticket-Buyer Alleging Illegal Ticket Scalping Scheme
Lawsuit states Ticketmaster violated state laws when it orchestrated a massive secondary ticket sale scheme from which it profited.
SAN FRANCISCO – A California concert-goer has hit Ticketmaster with a class-action lawsuit alleging the ticket-sales giant engaged in an illegal scheme that cost ticket buyers and secretly facilitated a secondary-ticket resale-scalping operation, according to the suit filed today by Hagens Berman.
The class action was filed in the U.S. District Court for the Northern District of California and states that Ticketmaster LLC and Live Nation Entertainment Inc. – collectively as Ticketmaster – knowingly worked with ticket scalpers purchasing tickets off its primary site to make money off of secondary ticket resales.
The law firm is seeking to represent consumers who purchased secondary market tickets through one of Ticketmaster’s fan-to-fan resale sites (such as TicketMaster.com/verified, TicketExchangeByTicketmaster.com or TicketsNow). If you believe you have been affected by Ticketmaster’s scheme and purchased secondary market tickets through one of these sites, find out more about your rights.
The lawsuit states that Ticketmaster has worked with scalpers to obtain a second cut on the ticket resale from scalpers to show-goers, an amount that is even more than the original cut Ticketmaster receives selling the ticket to scalpers.
“When you think of ticket buyers being swindled by scalpers, you likely imagine last-minute sales outside venue doors. You certainly wouldn’t assume the company selling the tickets – Ticketmaster – to be the ringleader behind massive price hikes spanning millions of tickets,” said Steve Berman, managing partner and co-founder of Hagens Berman.
Well known to fans and event attendees, when Ticketmaster tickets go on sale, scalpers, using bots and fake identities, immediately scoop up available tickets, forcing legitimate fans to pay top dollar to attend.
“What has been uncovered recently is that not only did Ticketmaster fail to remedy this ongoing illicit activity – unlike its competitors – but it actively facilitated scalping of its tickets because, behind the scenes, Ticketmaster has been raking in profits from these deals, looking to cash in twice,” Berman said.
The suit states that for some events Ticketmaster requires consumers to present the credit card used to purchase the ticket to gain access to the venue. But as to the vast majority “Ticketmaster hasn’t wanted to rid itself of scalpers because, as it turns out, they have been working with them.”
A “Highly Controlled Black-Market Scheme”
According to the lawsuit, Ticketmaster has developed a professional reseller program and within the past year also launched TradeDesk, a “web-based inventory-management system” for scalpers. The system allows scalpers to upload large quantities of tickets purchased from Ticketmaster for quick resale. Before TradeDesk, Ticketmaster provided scalpers with access to a similar system known as EventInventory.
“The resale program and TradeDesk appear closely guarded by Ticketmaster,” the suit states, based on reports from the Los Angeles Times. “Neither TradeDesk nor the professional reseller program are mentioned anywhere on Ticketmaster’s website or in its corporate reports… To access the company’s TradeDesk website, a person must first send in a registration request.” The suit states that some scalpers using the system have moved upwards of five million tickets via TradeDesk.
Ticketmaster receives a kickback, or second payment, from scalpers who use secondary resale sites, according to the class action. The suit also states that Ticketmaster reportedly held a private event for scalpers, where its rigged system was revealed by a team of undercover journalists posing as scalpers. They also uncovered Ticketmaster’s “Professional Reseller Handbook” which exposes that the company runs a reward program to further incentivize scalping on Ticketmaster resale consumer websites.
Ticketmaster’s scheme flies in the face of its official code of conduct for sellers that specifically prohibits them from purchasing tickets that exceed the posted ticket limit for an event, and prohibits the creation of fictitious user accounts for the purpose of circumventing ticket limit detection in order to amass tickets intended for resale.
Find out more about the class-action lawsuit against Ticketmaster.
[Thank you to Alex Teitz, http://www.femmusic.com, for contributing this article.]
[Editor’s note: You know what else really galls me? The fact that you get charged “fees” for each ticket you buy … not one fee for one order (i.e., 4 tickets = one fee) but multiple fees for each ticket!]