The illusive secondary market for tickets to live events from concerts and theater performances to sporting events may be experiencing a new step towards reform. The Federal Trade Commission took legal action against three New York-based ticket brokers and an officer of each entity for violating the Better Online Ticket Sales ("BOTS") Act. In 2016, the BOTS Acts was enacted to help curb companies and individuals from using computer software, or "bots," to purchase massive amounts of live event tickets and resell them to consumers for a mark-up. Pursuant to the BOTS Act, ticket brokers who use these bots are prohibited from circumventing purchase controls and ticket allocation measures used by online ticket sellers.
According to the consent order, Cartisim Corp. and Simon Ebrani; Just In Time Tickets, Inc. and Evan Kohanian; and Concert Specials, Inc. and Steven Ebrani, each purchased tens of thousands of tickets for performances and events and used hundreds of fictitious Ticketmaster accounts, credit cards, and IP addresses to avoid security measures and control systems implemented on the Ticketmaster websites. The defendants profited millions of dollars in revenue from sales made on secondary market ticketing platforms. The FTC determined that such actions prejudiced consumers, unjustly enriched defendants, and violated the BOTS Act and the FTC Act. The FTC entered orders against the defendants of more than $31 million, which are partially suspended due to the defendants' inability to pay. That said, defendants will cut checks to the FTC for civil penalties in the amount of $3.7 million.
Takeaway: In this first-ever case brought by the FTC over live event ticket sales, both first party sellers and third party purchasers should be aware of the FTC's ability to enforce the BOTS Act. Given the breadth of FTC's authority, we expect it will continue to use the BOTS Act as an enforcement tool against those who attempt to purchase bulk tickets to live events with the goal of reselling them at a markup to consumers.
This article is presented for informational purposes only and is not intended to constitute legal advice.