Earlier this year US President Donald Trump told the Federal Trade Commission that it should “rigorously enforce the BOTS Act”, which is the law that prohibits American ticket touts – or scalpers – from using special software to buy up tickets from primary ticketing sites.
New court papers reveal that that “rigorous enforcement” is now very much underway, which is good news for those campaigning against ticket scalping within the music industry. Though maybe not for Live Nation’s Ticketmaster, which – despite calling for more regulation of ticket resale of late – is accused of endorsing scalping practices that the FTC has now deemed unlawful.
That allegation has been made by the first ticket resale company to be targeted by the FTC. The company in question, Key Investment Group, claims that it has never violated the BOTS Act, despite having a team of people buying up tickets from multiple Ticketmaster accounts, using pseudonyms, a special web browser and a drawer full of spare SIM cards. But that’s all legit, it says, not least because “Ticketmaster has both expressly and impliedly authorised” these practices.
“We do not violate the BOTS Act”, the scalpers say in court papers filed last week, adding that Ticketmaster “is and has been at all times aware” of how it goes about sourcing tickets from the primary ticketing platform, including its “use of multiple accounts, some of which use pseudonyms”.
Not only that, but Ticketmaster “works actively with KIG” to resell scalped tickets that have been “purchased using accounts with pseudonyms on Ticketmaster’s platform”.
It’s not the first time Ticketmaster has been accused of working closely – via its own resale businesses – with ticket scalpers who were later accused of employing unlawful practices to source tickets. Indeed similar allegations were recently made in the UK – albeit in relation to events from the mid-2010s.
Ticketmaster bailed on for-profit secondary ticketing in Europe back in 2018, but a recent BBC investigation revealed that – when it still operated two resale platforms in Europe – it had close ties with certain industrial-level UK touts, including some that were subsequently jailed for fraud. That included offering one tout access to a senior Live Nation lawyer to get advice on changes to UK touting regulations.
Back in the US, KIG argues that Ticketmaster authorising its practices means it can’t be in violation of the BOTS Act. Which means, it claims, that the FTC – keen to meet Trump’s demands for a crackdown – is now basically rewriting and misusing the BOTS Act in an attempt to “destroy its legitimate business and, by extension, the entirety of the secondary ticketing market”.
For anti-scalping campaigners in the music industry, the destruction of the entire secondary ticketing market would be a happy outcome.
The FTC was tasked with enforcing the BOTS Act when it was first passed back in 2016, but campaigners have often argued that so far that enforcement has been somewhat lacking. Which made Trump’s intervention via an executive order at the end of March a welcome development.
Following KIG’s revelation that it is being targeted by the FTC, Nathaniel Marro, Executive Director of the National Independent Talent Organization, said he is “encouraged to see” the agency cracking down on “BOTS Act violators”, adding that NITO “will happily assist their efforts anyway we can”.
And as for KIG’s insistence that its conduct doesn’t break the rules, Marro adds, “If KIG doesn’t think multi-account behaviour violates the BOTS Act, they should go back and read the law”.
KIG’s legal filing cites a key line from the BOTS Act right at the top. The act says it is unlawful to “circumvent a security measure, access control system, or other technological control or measure on an internet website or online service that is used by the ticket issuer to enforce posted event ticket purchasing limits or to maintain the integrity of posted online ticket purchasing order rules”.
The legal filing then describes in some detail how KIG and its sister companies, including TotalTickets and Front Rose Tix, source tickets from the main Ticketmaster site in order to then resell them on the secondary market.
Employees operate multiple Ticketmaster accounts, using pseudonyms and an assortment of SIM cards so that each account can have a different mobile number attached to it. They then have all those accounts open simultaneously using the Insomniac web browser, which allows different accounts to be open at the same time in different tabs.
Then when tickets go on sale for in-demand events the employees join the queue in all of their different accounts aiming to buy up lots of tickets for resale.
While an operation that requires a load of pseudonyms, multiple SIM cards and a special browser hardly sounds super legit, KIG insists that it is not actually circumventing any security measures, access control systems or other technological controls that aim to restrict ticket purchases.
“KIG does not use multiple accounts or pseudonyms to circumvent any of Ticketmaster’s security measures, access control systems or other technological controls”, it insists in its court filing. “Using multiple accounts with distinct, readily-identifiable pseudonyms serves KIG’s legitimate business needs. This is why KIG and many – if not all – legitimate secondary-ticket brokers use pseudonyms”.
Ticketmaster remains more active in the secondary ticketing market in North America than in Europe. Though that hasn’t stopped Live Nation from calling for more regulation of ticket resale in the US, possibly to distract law-makers from proposals to ramp up regulation of primary ticketing. That has involved Live Nation execs more overtly criticising some elements of for-profit scalping.
That criticism by Live Nation of the scalpers makes KIG’s claims that Ticketmaster “expressly and impliedly authorised” its practices all the more interesting.
For KIG, the fact Ticketmaster allegedly knew about and authorised its use of multiple accounts and pseudonyms is key to its argument that its practices were not intended to circumvent any rules or restrictions put in place by the primary seller. And therefore does not violate the BOTS Act.
But it also suggests that Live Nation has remained quite close to the scalpers it has increasingly criticised in recent years. As well as allegedly being aware of how KIG sources its tickets, “Ticketmaster’s ticket resale programme actively works” with the scalping firm, it claims.
That includes “providing KIG with tools to manage its multiple accounts and more easily resell tickets on Ticketmaster. Ticketmaster syncs all KIG accounts and pays KIG a single cheque for all tickets resold on all KIG accounts each week, including those accounts using pseudonyms”.
All of which means we await with interest for any response to all this from Live Nation as well as Trump’s anti-scalping chiefs at the FTC.
