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FTC publishes Ticketmaster/Springsteen report

By | Published on Friday 19 February 2010

As expected, the US Federal Trade Commission yesterday published the findings of its investigation into the operations of TicketsNow, Ticketmaster’s US-based secondary ticketing service.

And for those who like to think of the ticketing giant of being just this side of Hitler and Stalin on the evil scale, there’s some good material for you to use here in forming future anti-Ticketmaster rants. FTC Chairman Jon Leibowitz said his body’s investigation into TicketsNow uncovered some “pretty shocking” practices and “deceptive bait-and-switch tactics”.

As previously reported, this all kicked off when Bruce Springsteen got angry that fans buying tickets for two of his gigs in New Jersey via his official ticket agent – Ticketmaster – were pointed towards the TicketsNow website, where tickets for said gigs were being sold at a mark up, even before Ticketmaster’s allocation of normal priced tickets had sold out. Once Springsteen got angry both New Jersey and federal regulators got angry too, as did fans, politicians, artists and managers, resulting in much Ticketmaster bitching, several civil lawsuits, and both state and federal level investigations into the operations of TicketsNow and the growing online ticketing touting market in general.

As also expected, the FTC’s investigation into the matter will result in Ticketmaster having to refund any mark-ups paid by Springsteen fans who bought tickets via TicketsNow for the two New Jersey gigs. It’s thought there are about 800 fans who did so, and the refunds could cost the ticketing firm – now part of Live Nation of course – a few hundred thousand dollars.

But the FTC’s ruling actually goes further than this. First, they are applying the settlement with Ticketmaster to fourteen Springsteen gigs, meaning thousands of fans could be due refunds, costing the company millions.

Second, they have issued guidelines to all ticketing companies regards the practices employed by secondary ticketing services. Of particular concern is the sale of “phantom tickets” on re-sale sites, whereby touts take money for tickets they don’t currently possess on the hope they can secure them once a fan has placed an order. The FTC is calling on the ticketing industry to provide consumers with more transparency regarding secondary ticketing. Leibowitz: “Clearly consumers deserve better. They deserve to know what they’re buying, including the risk that their tickets won’t materialise”.

Leibowitz admitted that while committing to pay millions of refunds, Ticketmaster had not actually admitted to any wrongdoing as part of this settlement. He also confirmed that there was no evidence that Ticketmaster had deliberately provided tickets for resale on its secondary site rather than selling them direct to fans, as some had alleged. A spokesman for Live Nation focused on these facts in his response, telling reporters: “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”, before adding that the company now hoped to “move forward” on this issue, now that the FTC’s investigation into the Springsteen tickets debacle was complete.

Of course, the growing secondary ticketing industry has been controversial on both sides of the Atlantic in recent years. As previously reported, the UK government this week said it supported a voluntary code of conduct written by the ticketing industry, including the growing number of secondary ticketing resale websites, and that it was confident the code would protect consumers who buy tickets from online touts. UK ministers had threatened to introduce new laws to regulate touting, similar to those that already exist for football tickets, but it transpired the political types didn’t really have an appetite for such legislation.

While it is secondary ticketing that has got most attention of late, and which most bothers key players within the live music industry as well as decision makers outside the business, the entire ticketing industry could do with undertaking a serious review of the way it works.

Pretty much every gig goer in the world genuinely believes they are being ripped off to high heaven whenever Ticketmaster or their like add one, two, three or more commission charges on the top of the price printed on the ticket they buy, with pretty much everyone of the opinion “why don’t they just include ticketing charges in the actual ticket price?”

Now that the combined Live Nation Ticketmaster is an “artist-to-fan vertically integrated live entertainment platform” perhaps they’ll start listening to the fans on this issue. Well, you know, it could happen.