Ticket scalpers: ACCC returns serve

Posted in Antitrust and competition

Anyone who has sought to buy tickets for a concert or major sporting event is likely to be familiar with the practices of “ticket scalpers” or “ticket touts” – those who systematically buy large numbers of sports and entertainment event tickets with the sole aim of reselling at an exorbitant amount above the initial purchase price once the event sells out. Whilst this is not a new problem, in the digital age this problem has increased, largely due to the use of “bots” – automated software programs that allow ticket scalpers to circumvent the security measures on ticketing websites to rapidly buy tickets in large quantities and place them on resale websites at inflated prices.

In Australia there is no blanket ban on the resale of tickets, with the exception of certain State or Territory laws (for example, amendments to the Fair Trading Act 1987 (NSW) that commenced on 1 July 2018). Whilst an event organiser or ticketing agent may potentially commence civil proceedings against a ticket scalper where a ticket is resold in breach of the ticketing T&Cs there are numerous hurdles to such an action. The resale restrictions must be properly drafted into the ticketing T&Cs and the event organiser or ticketing agent must have the appetite to bring the claim. The commencing party would also face various evidentiary burdens in establishing loss or damage large enough to justify commencing proceedings.

Alternatively, the Australian Consumer Law (ACL) provides a number of consumer protections and guarantees that, together with existing State and Territory laws in Australia, may provide some protections and remedies to address issues associated with reselling and scalping in the secondary ticket market. These include provisions that prohibit false and misleading information, misleading or deceptive conduct, unconscionable conduct and bait advertising.

While these existing laws provide a level of coverage to address issues associated with ticket reselling, the effectiveness of such laws and any remedies depends in part on consumers understanding their legal rights and then taking action in response to a breach. Accordingly, it is no surprise that Australia has not seen an individual commence proceedings in respect of alleged ACL breaches in connection with the secondary ticket market. It is therefore left to the Australian consumer watchdog, the Australian Competition and Consumer Commission (ACCC) to step in and investigate the potentially unlawful practices of large ticket resellers, as was the case in the 2018 Federal Court hearing against Viagogo alleging false or misleading representations, and misleading or deceptive conduct, regarding the price of tickets on its online platform. In particular, it was alleged that Viagogo misled consumers by making representations on its website that tickets were scarce and likely to run out soon, without disclosing that such “scarcity” referred to tickets on its website only and that Viagogo allegedly misled consumers by referring to itself as an authorised seller through the use of the word “official” in search engine advertisements and creating an impression that a consumer was purchasing official original tickets rather than resold tickets.

Since the ACCC commenced investigations into Viagogo, similar actions have also been commenced against Viagogo in the United Kingdom and New Zealand by their respective competition and consumer watchdogs. As we await judgment from the Australian ACCC v Viagogo matter, this will serve as an important test case regarding the remedies and penalties applicable to misleading or deceptive conduct by ticket resellers.

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