CMU Trends Live Business

Trends: How the Consumer Rights Act will impact on secondary ticketing, or not

By | Published on Wednesday 15 April 2015

Ticket Tout

A year ago we reported on developments in Parliament that could result in some new regulation for the buoyant secondary ticketing market. And a year on, some new regulations have indeed made their way on to the statute book. Though the grandest of the plans discussed in the last year wasn’t, in the end, included. As the Consumer Rights Act becomes law, we review what happened.

Ever since online ticketing touting first went mainstream there have been calls from across the music industry for Parliament to regulate the secondary ticketing market in some way.

But, while many politicians have expressed concern at how so many tickets for in-demand events now show up on auction sites with massive mark ups – and indeed the last Labour government at one point called on the music industry itself to tackle the problem in some way – in the main Westminster and Whitehall have been hesitant to act on the issue. Except when it came to Olympics ticketing, then an outright ban on the touts was quickly instigated.

There are probably a number of reasons for this failure to act on the wider problem. Some are reluctant to be seen to interfere with an open market, to prevent people from choosing to buy and sell tickets if they so wish.

Others may be influenced by more pragmatic concerns, how would any restrictions on ticket touting be enforced, especially when secondary ticketing websites can always base themselves outside the jurisdiction of the UK courts. After all, it’s already illegal to tout tickets to football matches in the UK, and yet people do it all the time. And even if there was a way to enforce the ban, who’d pay for it?

It’s also worth noting that the secondary ticketing companies that have emerged in the last decade, which provide the market-place for the touts, have lobbied pretty hard to stop any possible regulation. Ironically, given the music industry has generally been officially anti the touts, in recent years that lobbying effort has been led by Live Nation’s Ticketmaster, which has built up a good secondary ticketing business alongside its primary ticketing operations.

These companies usually argue that an outright ban on, or over regulation of, ticket touting will simply drive the touts to sites outside the UK which often do less to protect consumers. Because, say the UK-based secondary sites, while they may routinely facilitate the sale of tickets with massive mark-ups, they at least work hard to ensure actual tickets exist, and that consumers are not the victims of fraud. Would sites elsewhere do that?

Nevertheless, last year Sharon Hodgson MP, who has long campaigned on this issue, teamed by with Mike Weatherley MP to form an All-Party Parliamentary Group to consider what could be done about ongoing ticket touting concerns. And while it seemed unlikely the current UK government would ever tackle this issue head on, they came up with the clever plan to add a section to the in-development Consumer Rights Bill that would cover the secondary ticketing sector.

These proposals never set out to completely ban ticket touting, rather to regulate it. Nevertheless, the secondary ticketing sites objected, wheeling out the “it’ll send the touts underground” line once again. And their lobbyists scored some success. While the House Of Lords supported Hodgson and Weatherley’s proposals last Autumn, the Coalition Government did not (despite Weatherley being a Conservative MP), meaning the proposals couldn’t get the all-clear from the House Of Commons.

But the two MPs did not give up. Some compromises were made, and some high profile figures in the entertainment industry were encouraged to speak up, so that, at the very last minute, the government agreed to smile on the introduction of some light regulation of the touting market. And those regulations have now been passed and will form part of the Consumer Rights Act.

The regulations will force ticket resellers to state certain facts about the tickets they are reselling, including face value and any restrictions that come with the ticket. And the secondary sites will also be forced to ensure that information is provided.

These are small steps for sure, but campaigners note that many consumers find the online ticketing world confusing, and don’t necessarily realise they are buying from a secondary seller, or that they are paying over the odds for their tickets. If nothing else, these changes should help ticket buyers know what they are buying, that they are dealing with a reseller, and what extra costs they are incurring.

But Weatherley and Hodgson’s original proposals had one other element that would have made this regulation a whole lot more significant, even though it would not have been an all out ban on the touts.

Because although – outside of football and the Olympics – it is not illegal to resell tickets to events in the UK, it is often a breach of contract on the seller’s part, in that the terms and conditions attached to most tickets say the ticket is non-transferable. Indeed some lawyers have argued that a ticket isn’t actually a product to be resold, but a contract between promoter and consumer, which cannot be transferred to another party without the former’s express permission.

Which means that promoters are often within their rights to cancel tickets that they know have been resold. Though this right isn’t often exercised.

Partly because of the issues around upsetting a fan who may not even have realised they were buying a touted ticket; issues that might need to be dealt with at the busy entrance to a venue. And partly because it’s hard to know when tickets have actually been resold, unless the tickets are linked to a specific credit card or phone that is checked at the venue (an anti-touting method that has caused its own issues).

Of course a promoter can monitor the resale sites and see when their tickets are being resold, but touts usually sell anonymously, making it hard for the promoter to act. Which is why the original draft of Hodgson and Weatherley’s new rules included an obligation on tout and resale site to reveal the identity of the seller. Such information in the public domain would make it easier for anti-tout promoters to cancel touted tickets.

So it’s perhaps no surprise that this was the regulation that the secondary ticketing sites lobbied against the hardest. Because if such a rule led to the widespread cancelling of touted tickets (which wasn’t assured, but in theory possible), it could have really hurt the resale market. It might also have given credence to the allegations that some secondary ticketing sites are themselves in the touting game. (And, for that matter, it might have revealed how many artists and promoters now tout their own tickets, despite the industry being officially down on touting).

So, the removal of this rule in the compromise stage was significant. Though, nevertheless, the Consumer Rights Bill is a small win for the anti-tout campaigners, even if, realistically, it’s not one that is likely to have a massive impact on the resale market overall. Though Parliament is obligated to further review the issue down the line. And anyway, if touting is going to restricted, it seems increasingly certain that a technological rather than legislative solution will do it.