In a surprise, a Ticketmaster lawsuit has been filed by the Federal Trade Commission and seven states. Many customers have lodged complaints to the FTC over the years about the ticketing site’s alleged predatory practices, and the US federal agency is (finally) doing something about it. Ticket prices in the US tend to be much more expensive than it is in Europe and Australia, partly due to the lack of consumer protections when it comes to reselling tickets. Here’s an explanation of what this lawsuit against Ticketmaster, which is owned by Live Nation, is about.
Ticketmaster has been sued for ‘bait-and-switch pricing’
The FTC alleges that Ticketmaster coordinated with secondary brokers by selling them tickets beyond the set limit and then having them sell those tickets on the site at much higher prices.
This “bait-and-switch pricing,” according to a statement made by the FTC, artificially increases the cost of tickets and prevents “ordinary Americans from purchasing tickets to the shows they want to set at the prices artists set.”
The agency accuses Ticketmaster for knowing but not doing enough about brokers and scalpers illegally making thousands of accounts on the site to purchase tickets. In fact, it says that an internal email by one of the company’s executives says it will “turn a blind eye as a matter of policy” on this practice. By doing this, these brokers can then upsell these tickets on the platform through its secondary market, which brings Ticketmaster additional profits in the form of extra fees and heavily marked-up prices.
On top of that, the FTC says Ticketmaster and Live Nation knew that it could have imposed better security measures, such as identity verification, to stop these brokers from grabbing all of the tickets, but they decided not to because it would have been “too effective.”
Worse, the site would then allegedly list lower prices to the public without transparently revealing all of the fees, with executives acknowledging that they engaged in this deceptive pricing after learning through internal research that consumers would more likely consider passing on a ticket if they knew the full price at the start. (Who would have thought?)
In 2018, Ticketmaster was accused for operating its own covert scalping racket.
