The U.S. House of Representatives Energy and Commerce committee today (Nov. 21) announced a bi-partisan investigation into the ticketing industry aimed at long-standing consumer complaints about the primary and secondary ticketing industries.
While the peculiarities of the live entertainment ticketing business have long been for fodder for politicians eager to capitalize on an opaque business that operates under its own set of counter-intuitive market dynamics, Thursday’s announcement represents a further escalation of congressional scrutiny the key players in the ticketing business that’s been building for some time.
The House Energy and Commerce Committee is considered to be the chamber’s second most powerful committee, according to a 2013 report by the Sunlight Foundation, because of its broad jurisdiction into all facets of American business. The rare bi-partisan nature of the investigation — Democratic chairman Frank Pallone Jr. and ranking member Greg Walden are signatories along with four other subcommittee chairs and ranking members — during the bitterly partisan impeachment inquiry into President Donald Trump is a sign of growing public discontent with the ticketing business and “potentially unfair and deceptive practices occurring in the primary and secondary ticket marketplace, many of which have been documented in consumer complaints, press stories, and government reports,” according to a committee letter sent to the heads of six major ticketing companies — Live Nation (which owns Ticketmaster), AEG (which owns AXS Ticketing), Stubhub, Vivid Seats, TicketNetwork and Tickets.com.
The committee’s list of concerning trends includes issues unique to resellers — anger over the sale of speculative tickets wherein scalpers sell tickets they don’t actually own, as well as complaints about deceptive websites that trick consumers into thinking they are buying directly from the show producer when they’re really buying from a third party — and issues in the primary ticketing marketing involving the disclosure of available inventory and a lack transparency about what is and isn’t available.
The committee letter also addressed long-standing complaints about hidden fees which affects both primary and secondary tickets, but it’s the committees fifth point, focusing on the transferability of tickets, that represents a part of the business where legislation could have a lasting impact on which companies dominate the ticketing business in the next decade. The debate over transferability is the crux of disagreement between Ticketmaster, which has invested millions in technology to digitize tickets and exercise greater control of where inventory is bought and sold, and secondary market companies like StubHub, which want the government to prevent Ticketmaster from restricting tickets sales to the Ticketmaster platform.
Thursday’s announcement follows a public pressure to regulate ticketing, beginning in 2016 with the passage of the Better Online Ticket Sales (BOTS) Act of 2016, which banned the use of automated BOTS to buy tickets but has never been enforced by the Federal Trade Commission. That was followed by a U.S. Government Accountability Office report in April and a request for a FTC investigation by Pallone two months later, neither of which yielded any materials changes to the ticketing business,
“Nonetheless, despite ongoing bipartisan efforts by the Committee, as well as federal agency action to better understand the current ticketing marketplace, consumers still face a host of troubling practices and trends in the ticketing industry,” the Committee leaders wrote in their letter “many of these issues relate to a lack of transparency and fairness, which places purchasers at an unfair advantage when attempting to buy tickets in the current marketplace.”
While the ticketing industry is largely cynical about the investigation announcement after decades of congressional hearings and federal inquiries that never yield legislation, the constant drumbeat against the major brands in the ticketing business shows that public discontent is worsening and that consumers are increasingly looking to their elected officials to take action.