THE Federal Trade Commission (FTC) is suing Ticketmaster and its parent company Live Nation, accusing them of utilizing “illegal” pricing practices which force consumers to pay more than tickets’ face value.
Consumers have long been stung by poor resale options that hit their back pockets.
Throughout the purchasing process, consumers may not see the additional mandatory fees tacked onto ticket prices[/caption]
The complaint, filed Thursday, alleges Ticketmaster is engaging with scalpers, allowing them to “unlawfully purchase” millions of dollars in tickets, supposedly increasing its profits.
“Defendants’ illegal conduct frustrates artists’ desire to maintain affordable ticket prices that fit the needs of ordinary American families, costing ordinary fans millions of dollars every year,” the lawsuit stated.
The FTC is also claiming that in private, the companies acknowledge their business model “prevent[s] ordinary Americans from purchasing tickets to the shows they want to see at the prices artists set.”
The commission named three “illegal practices” that Ticketmaster allegedly uses to “injure artists, cause consumers to pay significantly more for event tickets, and benefit Defendants’ bottom line.”
‘DECEPTIVE PRICES’
The complaint claims Ticketmaster displays “deceptively” low prices to consumers that don’t reflect the final cost at checkout.
Throughout the purchasing process, consumers may not see the additional mandatory fees tacked onto ticket prices.
The FTC has been trying to crack down on these “junk fees,” implementing a law that prohibits practices such as bait-and-switch pricing that “obscure and misrepresent total prices and fees.”
This rule now requires online sellers to disclose the total price prominently and upfront to consumers.
Consumers pay billions of dollars annually in mandatory fees that are not initially listed in prices, according to the FTC.
Ticketmaster also allegedly engaged in strict ticket limits for ordinary consumers, restricting the number of tickets one can purchase, while allowing ticket brokers to purchase beyond the limits.
“Defendants have known for years that ticket brokers often buy as many as thousands of tickets for a single event, denying ordinary fans the opportunity to purchase them ‘at the prices artists set,’” the lawsuit alleged.
Scalpers significantly impact consumer experience when purchasing tickets.
Shoppers can end up buying tickets with inflated prices, sideling those who are unable to afford the increased prices.
An FTC document from 2008 revealed tickets in the resale market are priced an average of 39% above face value.
Scalpers also reduce the availability of tickets as scalpers can buy a large amount of tickets within minutes of tickets going live.
YouGov reported in 2013 that the most common reason behind Americans purchasing resold tickets is because they had no other way to buy tickets for an event.
‘NO CHOICE’
The FTC lawsuit alleged Ticketmaster’s conduct gives consumers “no choice but to resort to purchasing tickets at a steep markup in the resale market.”
Consumers may also run into ghost tickets–tickets that don’t actually exist.
Scalpers can sell tickets that they don’t actually have, causing financial losses and disappointment to customers.
Thursday’s lawsuit also alleged that Ticketmaster has earned hundreds of millions of dollars in revenue by violating the Better Online Ticket Sales Act which prohibits the selling of tickets already bought within measures used to enforce purchasing rules or limiting of ticket purchases.
“American live entertainment is the best in the world and should be accessible to all of us,” FTC Chairman Andrew N. Ferguson said in a statement. “It should not cost an arm and a leg to take the family to a baseball game or attend your favorite musician’s show.”
The U.S. Sun has approached Ticketmaster for comment.
Ticketmaster data breach
In summer 2024, more than 500 million Ticketmaster customers were reportedly victims of a data breach.
- In June 2024, Ticketmaster notified users of a data breach resulting in 560 million users’ data being leaked.
- The company told the U.S. Securities and Exchange Commission (SEC) that “a criminal threat actor” offered to sell users’ information on the dark web.
- Before the official announcement on May 28, hacking group ShinyHunters claimed responsibility.
- ShinyHunters is an international cyber threat group that has claimed to have breached large companies such as Microsoft and AT&T.
- The group sought $500,000 for the 1.3TB of Ticketmaster’s customer information, including addresses, phone numbers, and credit card details.
- Ticketmaster’s parent company, Live Entertainment, confirmed that the data breach happened because of unauthorized access to a third-party cloud storage platform.
- Although Live Entertainment has not stated which third-party database leaked the information, it is speculated that the AI cloud database platform, Snowflake, was compromised.
