Lawmakers grill Ticketmaster, StubHub execs over online ticketing

House lawmakers on Wednesday grilled executives at some of the country’s top online ticketing companies, including Ticketmaster and StubHub, over the industry’s practices.

The members of the House Energy and Commerce Subcommittee on Oversight and Investigations sought answers on how the companies make decisions on setting prices and availability for tickets sold online.

“Unfortunately, the industry’s online financial success has often been at the expense of the consumer,” subcommittee Chairwoman Diana DeGette (D-Colo.) said during her opening remarks.

“While it is certainly easier to buy tickets to live events today, online ticketing sales have led to anti-consumer practices across the industry,” she continued.

Wednesday’s hearing with executives from six major ticketing companies follows years of frustration among lawmakers and the general public with online ticketing, with complaints of high prices or fees and often scarce tickets to events.

DeGette cited reports from the New York state attorney general and the Government Accountability Office (GAO), both from prior years. The New York attorney general report from 2016 found several cases of ticket brokers making massive profits by buying and reselling coveted tickets to big events. The 2018 GAO report, meanwhile, found that more than 25 percent of ticket prices online are frequently not visible until consumers are late in the buying process.

DeGette highlighted five issues in the industry: high hidden fees, restrictions on transferring tickets, the lack of transparency on how many tickets are available, fraudulent “white label” websites and speculative ticket sales.

Amy Howe, the chief operating officer of ticketing giant Ticketmaster, said she shared those concerns, but told lawmakers her company is intent on addressing them. Howe also shifted some of the blame to bad actors and what she called a difficult market, where many consumers were chasing too few tickets.

“The greatest challenge is simply supply and demand,” Howe said in her testimony. “We invest millions of dollars annually toward protecting our platforms so that fans, clients and brokers can avoid issues created by bad actors.”

“Ticketmaster bans speculative ticketing on our platform, we report deceptive websites, we combat bots and we support all-in pricing,” Howe added.

Bots, or automated applications that perform tasks, in this case buying tickets immediately when they go on sale to then resell, have been a particularly challenging issue for the industry.

“Bots are often singularly blamed as the reason fans have difficulty accessing tickets,” Stephanie Burns, vice president and general counsel at competing platform StubHub, told the panel.

Congress has taken steps to address bots in the live event ticketing industry. In 2016, it passed the Better Online Ticket Sales (BOTS) Act, which made it illegal for individuals to circumvent purchasing limits. 

The representatives of the six ticketing companies testifying before Congress on Wednesday all applauded the bill, but also called for more legislative action to tackle bots.

Some of the committee members agreed.

The BOTS Act “was signed into law in 2016, yet neither the Federal Trade Commission (FTC) nor the states have taken enforcement action under this statute to date,” said Rep. Greg Walden (R-Ore.), the ranking member of the full Energy and Commerce Committee.

“I understand bad actors utilizing bots to game our system may be beyond our borders, but that does not mean they are beyond our reach,” he continued.

The committee’s consumer protection subpanel is also set to review the BOTS Act.

Rep. Jan Schakowsky (D-Ill.) asked the panel about what role the FTC could have in better protecting consumers.

“The most important thing is to enforce the BOTS Act,” Howe said. “We invest a lot of money, but without strong enforcement it’s going to be very difficult to really solve that problem.”

Burns agreed about the need for tougher enforcement of the BOTS Act and added that the FTC could do more to encourage competition between companies in the industry.

Rep. Yvette Clarke (D-N.Y.) brought up the issue of competition more directly later in the hearing, pointing to reports that Ticketmaster controls between 70 and 80 percent of initial ticket sales.

“According to a 2018 article in the New York Times, Live Nation operates more than 200 venues worldwide, promotes more than 30,000 shows around the world and manages over 500 artists,” Clarke said.

“At the same time, Ticketmaster, which merged with Live Nation in 2010, handles tickets for 80 of the top 100 arenas in the country and sold more than 500 million tickets in 2018.”

Democrats have pushed for regulators to take a new look at whether Ticketmaster is honoring the terms of a massive 2010 merger with Live Nation. The two companies are part of the same entity, Live Nation Entertainment.

Across the Capitol, Sens. Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) sent a letter to the Department of Justice last year calling for a review of the industry, saying Live Nation Entertainment has “virtually unchallenged” dominance of ticketing.

Clarke pressed Howe on Wednesday on whether Live Nation has threatened to skip over venues if they did not use Ticketmaster.

“I’m not aware of any,” Howe said, noting that the company agreed to a new consent decree with the Department of Justice recently, which sets conditions they must abide by to ensure the 2010 merger does not hurt their competitors.

Congress is also considering a bill known as the BOSS Act.

Reintroduced in 2019 by Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) and Rep. Bill Pascrell (D-N.J.) in the House, the bill, a reference to the nickname of rock star Bruce Springsteen, would require companies to use all-in pricing and publicize how many tickets are being held back from average consumers.

Pallone pressed the panel about all-in pricing, where fees normally added at the end of the ticket purchasing process are included from the beginning.

Howe said it would “help consumers make the right decisions.”

Burns, though, said the industry would need Washington to act, saying that clear guidelines and universal enforcement would be needed to ensure all-in pricing was adopted industry wide.