The US Federal Trade Commission has begun the Donald Trump-ordered crackdown on American ticket touts, filing a lawsuit against Key Investment Group, which does business as TotalTickets and Front Rose Tix, among other names.
President Trump made it “clear” in a March executive order on the ticketing sector that “unscrupulous middlemen who harm fans and jack up prices through anticompetitive methods will hear from us”, says FTC Chair Andrew N Ferguson, who announced the litigation.
Key Investment Group - or KIG - is accused of using dubious tactics to get hold of tickets from primary platforms, including Live Nation’s Ticketmaster, in order to resell them at hiked up prices on the secondary market.
That mainly means tactics that circumvent the restrictions put in place by primary sellers on how many tickets any one person can buy for any one show. Conduct that KIG previously argued is legit and even endorsed by Ticketmaster, but which the FTC believes violates the US BOTS Act, which the government agency is meant to enforce.
“For just one Taylor Swift concert”, an FTC statement says, “the defendants allegedly used 49 different accounts to purchase 273 tickets, dramatically exceeding the six-ticket purchase limit per event”. Those tickets were then “resold at a significant mark-up”.
The lawsuit against KIG, Ferguson continues, puts ticket touts - or scalpers and brokers if your prefer - “on notice” that - while Trump is in the White House - the FTC “will police operations that unlawfully circumvent ticket sellers’ purchase limits, ensuring that consumers have an opportunity to buy tickets at fair prices”.
The FTC’s statement also outlines some of the dubious tactics KIG employs, including having multiple Ticketmaster accounts, using pseudonyms on those accounts and relying on an assortment of SIM cards so that each account can have a different mobile number attached to it.
It also utilises “thousands of virtual and traditional credit card numbers” to make it look like different people are buying all the tickets.
We actually knew most of that already because last month KIG pre-empted the FTC's litigation with its own court filing. It admitted that it uses multiple Ticketmaster accounts, pseudonyms and multiple SIM cards, but insists that none of that actually violates the BOTS Act.
The act says it is unlawful to “circumvent a security measure, access control system, or other technological control or measure” designed to enforce ticket purchasing limits.
But, KIG argued in its court filing, it’s not doing any of those things when it employs pseudonyms, and uses spare credit cards and SIM cards, to buy tickets from the Ticketmaster website.
It then backed up that argument by claiming that Ticketmaster itself had “expressly and impliedly authorised” its practices, and why would the Live Nation ticketing company do such a thing if its security measures or access control systems were being circumvented?
If this case gets to court, those arguments will be presented in front of a judge. Which could be problematic for Ticketmaster, even though it’s not directly involved in this case.
KIG’s claims that Ticketmaster endorses its ticket buying tactics isn’t necessarily helpful now that Live Nation’s official communications have become much more critical of the touts, including in the US.