FTC Files Lawsuit Against Ticketmaster and Live Nation for Alleged Misconduct in Secondary Ticket Sales
In a significant development, the U.S. Federal Trade Commission (FTC) and seven states have filed a lawsuit against Live Nation Entertainment Inc. and its subsidiary Ticketmaster. The lawsuit alleges that the companies have violated both the FTC Act and the Better Online Ticket Sales Act (BOTS Act).
The FTC claims that Ticketmaster has failed to enforce its own purchase limits, allowing resellers to buy up large numbers of passes for popular events. This practice, according to the FTC, enables Ticketmaster to 'triple dip' on fees, earning money on the first ticket sale, as well as from both the buyer and seller on resales.
The BOTS Act, passed in 2016, was designed to prevent large-scale ticket scalping by banning the use of bots. The FTC alleges that Ticketmaster systematically ignores ticket brokers that bypass its limits because it earns money from resales.
The lawsuit further alleges that Live Nation and Ticketmaster have failed to prevent the use of automated ticketing bots and large-scale resale operations. This unlawful conduct, asserts the FTC, injures fans, who pay more than the advertised ticket price for both box office and resale tickets.
The FTC states that Ticketmaster took in $11 billion in fees on primary and resold tickets between 2019 and 2024. On the first sale, the FTC claims that Ticketmaster's fees averaged between 24% and 44%, requiring consumers to pay $16 billion, much of which is retained by the company.
The FTC's allegations against Ticketmaster include systemic ignorance of ticket brokers that bypass its limits, as well as tacit coordination with brokers. These practices, the FTC argues, are in violation of the BOTS Act and the FTC Act.
In response to the lawsuit, Live Nation shares experienced a 3.5% intraday drop, the biggest since May 29. However, it's important to note that since early September 2023, there are no publicly reported charges by any authorities against Live Nation Entertainment Inc. or its subsidiary Ticketmaster regarding violations of laws.
This isn't the first time a ticket broker has faced legal action for BOTS Act violations. Earlier this year, the FTC sued a Maryland-based ticket broker for similar offenses in relation to Taylor Swift's Eras Tour.
The FTC has increased its scrutiny of ticket sales under the Trump administration, following a March executive order directing the agency to prioritize enforcement of the BOTS Act. The lawsuit against Ticketmaster is, therefore, part of a broader effort to ensure fair and transparent ticket sales for consumers.
The sued ticket broker has denied wrongdoing, claiming that the FTC has adopted an overly expansive interpretation of the law. The outcome of this lawsuit against Live Nation and Ticketmaster remains to be seen, but it underscores the ongoing efforts to address issues of ticket scalping and consumer protection in the ticket industry.
