Artists Lobbying Group Urges FTC Probe of Ticket Broker Tools

Music industry lobbying group the National Independent Talent Organization (NITO) is urging the Federal Trade Commission to investigate companies that create enterprise tools designed for use by ticket resale businesses. Such tools, the group argues, are in violation of the Better Online Ticket Sales (BOTS) Act, and driving up ticket prices on resale markets for consumers.

“The NITO FTC complaint details how multiple technology companies… provide tools that enable scalpers to circumvent ticket purchasing limits,” a press release accompanying the complaint reads. “These tools include sophisticated browser extensions, proxy services, and virtual credit card platforms designed to bypass security measures implemented by primary ticket sellers.”

NITO is one of multiple organizations that make up the so-called “Fix The Tix” coalition, which advocates for significant reform to the event ticket regulations ecosystem. Their preferred updates largely mirror those championed by Live Nation Entertainment in its “FAIR” ticketing campaign. These changes would effectively outlaw free market ticket resale in favor of a system where the primary seller or other companies chosen by the artist, venue, or promoter have full control over a ticket’s sale, transfer, or resale without competition from third parties.

The core of their complaint is that the use of such technology allows individuals and companies to get around efforts by Ticketmaster and other primary ticket sellers to control ticket distribution during the sales process. Such technology – or even the hiring of individuals to purchase tickets using individual accounts – violate the BOTS Act, and should be enforced.

Much of the technology outlined by the NITO letter was recently demonstrated at the World Ticket Conference (WTC) in Nashville. While this conference is open to the public and brings in businesses across different areas of the ticketing industry, NITO argues that the presence of these platforms being marketed at the WTC implies that they are designed for nefarious uses, an argument that the National Association of Ticket Brokers (NATB) disagrees with.

“The vast majority of technology exhibitors at the conference were inventory management systems that help ticket companies organize their tickets, offer them for resale, and help with pricing,” says Gary Adler, executive director of NATB, which hosts WTC. Anyone who purchases tickets to events has the ability to purchase and use any of the programs that NITO is attempting to paint as malicious, and many consumers have turned to such programs in an effort to get around the notoriously crash-prone Ticketmaster system during high profile event sales, he added.

Further, NATB was a supporter of the BOTS Act at the time of its passage, and fully supports the banning of bots. In nearly a decade of the BOTS Act being on the books, the FTC has only brought forward one enforcement action despite the industry lobby regularly blaming all consumer problems in ticketing on bots, independent ticket resale companies, or both.

“There are many friction points in ticketing,” Adler told Billboard “and high-tech ways that players in the system try to monopolize every dollar spent on ticketing and to prevent the resale of tickets. For more than half of events there are lower cost options on the secondary market and some in the primary market don’t like seeing their previously sold tickets being offered for resale at deep discounts.”

“We stand for doing resale the right way and passing strong laws to protect fans and competition across the ticketing industry,” he added. “If any exhibitors were offering technology that violates the BOTS Act, we want to know as they will not be welcomed back.”

Adler also remarked on the huge impact that ticket holdbacks have on the ticketing market and consumer prices. Such behavior – when promoters or teams only offer a fraction of available tickets for sale to stimulate the perception of low supply and justify the use of “dynamic” price-surging systems – is the true reason for soaring consumer ticket prices on the primary market, which itself drives the asking price for tickets on resale marketplaces.

“Artists, venues, and primary ticketers abuse technology every day to create fake scarcity and deceive consumers into paying higher prices when really they are secretly holding back tickets to slowly drip more on sale over time to cheat and fool the fan,” Adler told Billboard. “This is most likely an illegal deceptive marketing and advertising practice, driven by artists, venues, and primary ticketing companies, that the FTC should immediately investigate,” he continued.

Among the organizations directly noted by NITO as signed off on the complaint is Red Light Management, one of the biggest players in artist management. Its principal, Corin Capshaw, has publicly stated that he has a sizeable stake in Live Nation Entertainment, while serving alongside Oak View Group chief and former Ticketmaster and Live Nation head Irving Azoff on the board of the Music Action Coalition – another key supporting organization in the “Fix The Tix” group dominated by Live Nation allies.

| READ MORE – DOJ Alleges Oak View Group Colluded With Live Nation in Lawsuit | 

After outlining its specific arguments regarding what vendors it thought were in violation of the BOTS Act in its complaint, NITO also suggested specific next steps to be taken by the regulator, including the subpoena of customer lists and the investigation of ticket resale companies that use these tools.

The full complaint from NITO is available here.