By Cat Woods -
Taylor Swift has dominated global media for her phenomenal Eras tour, but that same event has made global news for the legal case brought by the US Federal Trade Commission (FTC) against a ticket reseller for price gouging. Australia’s approach to ticket scalping is inconsistent across the nation.
As Swift’s 2022 hit “Karma” goes, “Sweet like justice, karma is a queen”. The FTC is relying on more than karma in its lawsuit against the Maryland-based ticket resale company Key Investment Group and affiliated companies Epic Seats and Totally Tix LLC. The suit names executives from Key Investment Group, including CEO Yair D. Rozmaryn, CFO Elan N. Rozmaryn and CSO Taylor Kurth. In August, the FTC filed the suit, accusing the resellers of violating the FTC Act and the Better Online Ticket Sales (BOTS) Act to reap millions of dollars via selling price-gouged ticket on the secondary market.
The suit was filed in the US District Court for the District of Maryland, Northern Division. It claims that the company hid its identity to buy hundreds of thousands of tickets through the use of proxy and fake IP addresses, virtual and traditional credit card numbers, and thousands of Ticketmaster accounts. The FTC alleges the company bought at least 379,776 tickets (valued at $US57 million) from Ticketmaster over 12 months, which earned the company $US64 million on the secondary marketplace.
Specifically, Key Investment Group are accused of purchasing 2,280 tickets to 38 Swift shows, valued at $US744,970.29 and making $US1,961,980.65 on the secondary market (a $1,217,010.36 profit). Bruce Springsteen fans may also be counting on both karma and the FTC, since the FTC suit claims the defendant used 277 different accounts to buy 1,530 tickets to a Springsteen concert in 2023, which were sold on the secondary market for a $US20,900.84 profit.
The FTC claims that the defendant used tactics to bypass Ticketmaster’s security measures aimed at blocking resellers from violating ticket purchasing limits. According to the FTC, “these security measures include monitoring whether purchases are associated with verifiable Ticketmaster accounts and unique credit cards and IP addresses. In addition, Ticketmaster sometimes requires purchasers to enter a code sent to their cell phone to verify their accounts.”
In a statement, FTC Chairman Andrew N. Ferguson said, “President Trump made it clear in his March Executive Order that unscrupulous middlemen who harm fans and jack up prices through anticompetitive methods will hear from us. Today’s action puts brokers on notice that the Trump-Vance FTC will police operations that unlawfully circumvent ticket sellers’ purchase limits, ensuring that consumers have an opportunity to buy tickets at fair prices.”
Australia’s uneven state-based laws leave ticket buyers in limbo
Australia has no overarching federal legislation to address ticket scalping. Rather, the states and territories have individually attempted to address the exploitation of mass-ticket purchasing for resale through state-based laws, with the exception of the Northern Territory and Tasmania, which have no specific laws.
Post lockdowns, audiences developed an appetite for getting out on the town, resulting in the highest revenue and attendance measures since 2004. Live Performance Australia’s 2023 Ticket Attendance and Revenue Report indicated a total revenue of $3.1 billion, 30.1 million tickets sold, and an average ticket price of $111.48. NSW accounted for the highest market share of revenue (33.3 per cent) and NSW and Victoria accounted for 64.7 percent of all live performance revenue and attendance (61.2 per cent).
Matt Francis is the Head of Public Affairs for Live Performance Australia (LPA). He says, “LPA has consistently argued for a national uniform approach to laws on ticket reselling on the secondary market, including steps to stop scalpers and ticket bots.”
In NSW, Victoria, South Australia, Western Australia, and Queensland, there is a 10 per cent resale cap, but apart from that commonality, the laws vary as to the size and nature of events and venues where restrictions apply.
“There are differences across states and territories and the NT and Tasmania don’t have any protections at all,” explains Francis. “In Victoria, event promoters need to get a major event declaration to limit the resale of tickets at inflated prices, on a case by case basis.”
In October 2018, the Consumer Affairs Forum (CAF) (comprising all Commonwealth, state, territory and New Zealand ministers responsible for fair trading and consumer protection laws) agreed that online ticket resellers must disclose the face value of tickets and also disclose that the website is not a primary ticket seller. This agreement hasn’t resulted in legislation.
Francis says LPA doesn’t have any data on the value of ticket sales on the secondary market, but the major ticketing platforms do offer resale platforms which provide a channel for people with genuine need to resell their tickets to do so safely and securely.
He says, “The problem arises when tickets are bought for the purpose of resale at hugely inflated prices on other online platforms.”
“Ticketing platforms have made significant investments in technology to beat the bot attacks launched by scalpers which attempt to buy up as many tickets as possible for resale.”
“These attempts can number in the millions which deprives legitimate customers the chance to buy their tickets.”
Artists and fans are the losers in this game.
Francis says, “The profit from resale of tickets on the secondary market only goes to the scalper, not the artist or event promoter. It means genuine fans are deprived the chance to buy tickets, and (this) exposes them to risk of fraud or tickets being invalidated when they buy them through unauthorised reselling. “
He says genuine ticket platforms and promoters provide advice on their sites to minimise the risk of being targeted by scalpers.
“Promoters and ticket platforms make significant effort to ensure that genuine fans have the best opportunity to buy their tickets. That’s why it’s always important to follow their advice on how to get ready for ticket presales or general on sales. Advice such as not having multiple browsers open, which can trigger anti bot protection … Or registering for the presale so you have access to a unique code as part of the sale process.”
NSW trying to keep apace with ticketing technology
In NSW, the Fair Trading Act 1987 (NSW) covers some aspects of ticket scalping operations. Part 4A of the Act specifically relates to ticket resale, applicable if the ticket terms and conditions include restrictions on ticket resale. Section 58F of the Act prohibits advertising a ticket for resale for more than 10 per cent above the ticket’s original supply cost. The ‘original supply cost’ is the initial ticketed price (which is usually specified on the ticket itself) plus any associated costs, such as booking and delivery fees, and any credit card surcharge. It also prohibits event organisers from cancelling tickets that are resold within the price cap.
The Act also prohibits the ability to resell a ticket contingent upon buying something else or as part of a package, unless authorised by the event organiser. Advertising or listing tickets for resale must include specific details including the original supply cost and details of the location from which the ticket holder is authorised to view the event (the publication is liable for advertisements that breach these rules). The Act also prohibits the use of software to bypass security measures to purchase tickets, as witnessed in the Key Investment Group suit.
Section 58L of the Act makes it an offence for a specific event organiser or specified class of event organisers to fail to comply with an order by the Minister for Better Regulation and Fair Trading (presently Anoulack Chanthivong) to notify the public of the number of tickets available to an event for general public sale through authorised sellers. This information is to be published on the NSW legislation website within the time given in the order, and administrative law rules relating to procedural fairness apply.
The maximum penalties for breaching ticket reselling laws are 1000 penalty points ($110,000) for a corporation or 22 points ($22,000) for an individual. Fair Trading can also issue a $550 fine for individuals for any offence under the laws, including one-off breaches.
In January 2024, the Australian Competition and Consumer Commission’s (ACCC’s) Scamwatch received at least 273 reports relating to the sales of falsely advertisesd tickets to Taylor Swift’s impending Eras tour. Most of the reports were made by individuals in New South Wales (114) and Victoria (96). This is despite the Eras tour organisers announcing that no resale of tickets was permitted until the week before the event to prevent predatory conduct.
Francis points out that The National Cultural Policy, launched in 2023, included this action item:
“Protect performers and audiences from ticket scalpers by working closely with the live performance industry, including on compliance with the Competition and Consumer (Australian Consumer Law –Electronic Ticket Resale Service) Information Standard 2022.”
He says, “I am not aware of what steps have been taken in respect of this.”
Further reading:
Buying tickets to events | ACCC
LPA-Consumer-Guide-Buying-and-Selling-tickets-in-the-Ticket-resale-market.pdf
