FTC settles with Ticketmaster
by Wally Northway
Published: February 21,2010
WASHINGTON — The Federal Trade Commission (FTC) announced it has settled charges that Ticketmaster and its affiliates used deceptive bait-and-switch tactics to sell event tickets to consumers. Ticketmaster has agreed to pay refunds to consumers who bought tickets for 14 Bruce Springsteen concerts in 2009 through its ticket resale web site TicketsNow, and to be clear about the costs and risks of buying through its reseller sites.
According to the FTC’s complaint, when tickets went on sale Feb. 2, 2009, for Bruce Springsteen & The E Street Band concerts in May and June, Ticketmaster displayed a “No Tickets Found” message on its web page to consumers to indicate that no tickets were available at that moment to fulfill their request. The FTC charged that Ticketmaster used this web page to steer unknowing consumers to TicketsNow, where tickets were offered at much higher prices – in some cases double, triple or quadruple the face value. Ticketmaster also displayed the same misleading web page to consumers looking to buy tickets for many other events between Oct. 2008 and Feb. 2009, the agency charged.
“Buying tickets should not be a game of chance,” said FTC chairman Jon Leibowitz. “Ticketmaster’s refrain is that it sold through TicketsNow to give consumers more choices. But when you steer consumers to your resale web sites without clear disclosures, and they unknowingly buy tickets at higher prices, they’ll be left with a sour note.”
Compounding this deception, Ticketmaster failed to tell buyers that many of the resale tickets advertised on TicketsNow.com were not “in hand” – in other words, they were not actual tickets secured for sale at the time they were listed and bought. In fact, some tickets were being sold speculatively – that is, they were merely offers to try to find tickets. For example, many consumers hoping to go to a Springsteen concert at the Verizon Center in Washington, D.C., in May 2009 paid for tickets in February that never materialized. Ticketmaster kept the sales proceeds for more than three months without a reasonable basis for believing it could fulfill the orders, the FTC complaint alleged.
“TicketsNow.com sold phantom tickets without letting consumers know that the tickets did not exist. Then, the company held onto consumers’ money, sometimes for months, when it knew those fans weren’t going to see Springsteen,” Leibowitz said. “Clearly consumers deserve better. They deserve to know what they’re buying, including the risk that their tickets won’t materialize.”
Under the FTC settlement, eligible consumers who have not previously received a refund will get back the extra money they paid to buy the higher-priced tickets from TicketsNow. For example, if a consumer paid $400 for two tickets from TicketsNow, and those same two tickets would have cost $200 from Ticketmaster, the customer would get a $200 refund. Refunds will be determined by the FTC’s redress administrator based on purchase information in TicketsNow’s database and available in approximately six months.
The FTC staff is sending a warning letter to other ticket resale companies whose practices may violate the law. The letter discusses the Ticketmaster settlement and the FTC’s concerns about the failure to disclose to consumers when tickets offered for sale are speculative or otherwise not in hand. According to the letter, which is available at the FTC’s web site and as a link to this release, the FTC strongly recommends “that you review your own company’s web site to ensure that you are not making any misleading statements or failing to provide material information to prospective purchasers of tickets listed on your site.”
The complaint against Ticketmaster Entertainment, LLC, and TicketsNow.com Inc. also names Ticketmaster LLLC, a subsidiary of Ticketmaster Entertainment, LLC, and TNOW Entertainment Group Inc., a holding company for TicketsNow.com. The commission vote to authorize the staff to file the complaint and stipulated final order was 4-0. The FTC filed its complaint and stipulated final order in the U.S. District Court for the Northern District of Illinois Eastern Division.
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