The US’s Federal Commerce Fee (FTC) has sued Dwell Nation and its ticketing arm, Ticketmaster, accusing the corporate of cashing in on scalpers working on its platform.
In a grievance filed on Thursday (September 18) within the US District Court docket for the Central District of California, the FTC accused Ticketmaster of failing to uphold its personal ticket buy limits, in impact permitting scalpers to purchase up massive numbers of tickets and to resell them on the secondary market at markups.
The FTC says Ticketmaster is motivated to do that as a result of it makes extra charges on the tickets’ resale.
Ticketmaster “can ‘triple dip’ on charges, accumulating charges from: (1) brokers after they buy the tickets on the first market, (2) brokers, once more, when Ticketmaster sells their tickets on Ticketmaster’s secondary market, and, lastly, (3) customers who buy tickets from Ticketmaster on its secondary market,” acknowledged the grievance.
Becoming a member of the FTC within the lawsuit are the district attorneys of seven states: Colorado, Florida, Illinois, Nebraska, Tennessee, Utah and Virginia.
The grievance, which you’ll learn in full right here, alleges that Ticketmaster violated the BOTS Act, the 2016 regulation forbidding using bots to purchase tickets in on-line shops. Dwell Nation has prior to now supported the BOTS Act.
The FTC notes that Dwell Nation’s coverage is to permit artists to set ticket buy limits themselves, however “in non-public… defendants have tacitly labored with these exact same scalpers, permitting them to unlawfully buy thousands and thousands of {dollars} in tickets within the main market, in order that defendants can extract extra revenue for themselves when reselling these tickets on the secondary market.”
The FTC alleges that Ticketmaster has been conscious for years that sure ticket consumers have violated the restrict and “turned a blind eye” to the apply.
The grievance states that in 2018, Ticketmaster recognized 5 ticket brokers who managed 6,345 Ticketmaster accounts and possessed greater than 246,000 tickets to just about 2,600 occasions.
“Defendants have tacitly labored with these exact same scalpers, permitting them to unlawfully buy thousands and thousands of {dollars} in tickets within the main market, in order that defendants can extract extra revenue for themselves when reselling these tickets on the secondary market.”
FTC grievance in opposition to Dwell Nation/Ticketmaster
“In public, defendants preserve that their enterprise mannequin is at odds with brokers that routinely exceed ticket limits. In non-public, defendants acknowledge that their enterprise mannequin and backside line profit from brokers stopping strange People from buying tickets to the reveals they need to see on the costs artists set,” the grievance states.
The FTC additionally alleges that Ticketmaster is engaged in “bait-and-switch” techniques during which the corporate shows “deceptively low ticket costs to customers” and finally ends up charging “far more” at checkout.
Dwell Nation introduced in 2023 that it was switching to an “all-in” pricing mannequin at its owned venues within the US, beneath which the ultimate value, together with charges however excluding gross sales taxes, is proven on the very starting of the ticket buy course of. CEO Michael Rapino has stated that the swap to “all-in” pricing has confirmed to be a hit, and the corporate has backed efforts to make all-in ticket pricing the regulation.
Regardless of this, the FTC alleges that “over the past decade, the primary value the buyer has seen on Ticketmaster’s platform has nearly by no means been the value the buyer pays.”
“Based on inner Ticketmaster paperwork, the common proportion of charges charged on tickets ranges from 24% to 44% of the entire value. From 2019 by means of 2024, customers paid over $16.4 billion in obligatory charges on ticket purchases from Ticketmaster,” the grievance states.
The lawsuit is separate from the antitrust motion that the US Division of Justice launched in opposition to Dwell Nation and Ticketmaster in Could 2024. That lawsuit alleges that the corporate engaged in “monopolization and different illegal conduct that thwarts competitors in markets throughout the stay leisure trade.”
The DOJ lawsuit is looking for to interrupt up Dwell Nation and Ticketmaster, undoing a years-old settlement that allowed the 2 to merge regardless of issues over the corporate doubtlessly having fun with monopoly energy within the stay leisure enterprise. The DOJ has accused Dwell Nation of violating the phrases of that settlement.
In its new lawsuit, the FTC says Dwell Nation/Ticketmaster controls “roughly 80% or extra of main live performance venues’ main ticketing for live shows and a rising share of ticket resales within the secondary market.”
As of 12pm ET on Thursday (September 18), Dwell Nation shares have been down 3.6% on the New York Inventory Trade, buying and selling at round $163.30 per share.Music Enterprise Worldwide
