Ticketmaster has agreed to pay a C$4 million (US$3.1m) fine to settle an investigation by the Canadian Competition Bureau into alleged deceptive pricing online.

Three Ticketmaster companies, Ticketmaster LLC, TNow Entertainment Group Inc. and Ticketmaster Canada LP, will additionally pay $500,000 (US$382,200) to settle costs incurred by the bureau during its investigation, according to the competition regulator.

The Competition Bureau brought legal action against Ticketmaster Canada in January 2018, after an investigation found Ticketmaster’s advertised prices are deceptive because consumers must pay additional fees added later in the purchasing process. “This practice, which is known as ‘drip pricing’, results in consumers paying much higher prices than advertised,” said the bureau. “Ticketmaster’s mandatory fees often inflate the advertised price by more than 20% and, in some cases, by over 65%.”

“The bureau expects all ticket vendors to take note and review their marketing practice”

As part of a consent agreement registered with Canada’s Competition Tribunal, the Ticketmaster companies will also establish a “compliance programme” to ensure their advertising complies with Canadian law. The consent agreement has the force of a court order and will be binding for ten years.

The settlement concludes the regulator’s legal action against Ticketmaster. A private class-action lawsuit, led by Merchant Law Group, remains unresolved.

“Canadians should be able to trust that the prices advertised are the ones they will pay when purchasing tickets online,” says Canadian competition commissioner Matthew Boswell, commenting on the resolution of the case. “The bureau will remain vigilant and will not tolerate misleading representations.

“The bureau expects all ticket vendors to take note and review their marketing practices, knowing that the bureau continues to examine similar issues in the marketplace and will take action as necessary.”

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The Canadian Competition Bureau has closed its investigation into Ticketmaster’s TradeDesk, concluding the software does not contravene federal competition legislation.

The Competition Bureau, a Canadian government agency responsible for enforcing competition law, investigated the matter following allegations that Ticketmaster was facilitating the mass touting of tickets by enabling professional resellers to bulk-buy primary inventory and then sell it on the secondary market using TradeDesk, with the covert approval of Ticketmaster employees.

The company strenuously denied the allegations, with Ticketmaster North America president Jared Smith stating: “Ticketmaster does not have, and has never had, any programme or product that helps professional resellers gain an advantage to buy tickets ahead of fans.”

“We remain committed to advancing our ongoing litigation”

The Competition Bureau concluded that the company’s conduct did not contravene any rulings after reviewing public allegations, complaints and video evidence, as well as examining Ticketmaster’s behaviour, marketing practices and industry interactions.

The competition watchdog will, however, continue to pursue ongoing litigation against Ticketmaster, Live Nation and affiliated companies with regards to alleged misleading advertising in its ticket pricing.

“The Competition Act is the best tool to crack down on false or misleading representations, including misleading ticket price advertising,” says Matthew Bossell, the bureau’s interim commissioner for competition.

“That’s why we sued Ticketmaster, and we remain committed to advancing our ongoing litigation.”

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The Canadian Competition Bureau has followed through on its threat to take legal action against ticketing companies engaged in drip pricing, announcing late yesterday it is suing Ticketmaster over alleged “deceptive” claims relating to its ticket pricing.

An investigation by the Competition Bureau, the Canadian government agency responsible for enforcing competition law, found Ticketmaster’s advertised prices are deceptive because consumers must pay additional fees added later in the purchasing process. “This practice, which is known as ‘drip pricing’, results in consumers paying much higher prices than advertised,” reads a statement from the bureau. “Ticketmaster’s mandatory fees often inflate the advertised price by more than 20% and, in some cases, by over 65%.”

“In July, we called on ticket vendors to review their marketing practices,” explains Canada’s commissioner of competition, John Pecman. “Today, we are filing an application with the [Competition] Tribunal to stop Ticketmaster from making deceptive claims to consumers.

“Consumers must have confidence that advertised prices are the ones they will pay”

“Together, these actions send a strong signal to online retailers: consumers must have confidence that advertised prices are the ones they will pay.”

Ticketmaster, says the bureau, has made the alleged deceptive claims – which include service fees, ‘facility charges’ and order processing fees – on several of its websites, including ticketmaster.ca, ticketsnow.com and ticketweb.ca, as well as on mobile apps.

Drip pricing has also recently come under scrutiny in several European countries, including France and the Netherlands. The latter’s competition watchdog, the Authority for Consumers and Markets, said in October it was satisfied the ticketing sector had “turned a corner” after a majority of companies agreed to list all additional unavoidable costs up front.

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The Competition Bureau, the government agency responsible for enforcing competition law in Canada, has warned sellers of entertainment and sports tickets they could face court action unless they end the practice of ‘drip pricing’.

In a statement, the bureau calls on ticket agencies, both primary and secondary, to “review their marketing practices and display the real price of tickets upfront”. “To attract consumers, some companies in the ticketing industry offer low prices online or on mobile apps,” it reads. “However, additional mandatory fees, taxes or charges are added later in the purchasing process, and the real price of the tickets ends up being much higher.”

The intervention by the bureau follows a similar warning by its counterpart in the Netherlands, the Authority for Consumers and Markets, which has given ticket agencies until 1 October to include all additional “unavoidable costs” in the base price of tickets.

Research by the Competition Bureau shows additional mandatory fees could increase the prices consumers pay for concert tickets by up to 57% more than advertised.

“To promote continued innovation … it’s critical that consumers have confidence the prices they see online are the ones they will pay”

“Canadians spend billions of dollars online each year buying tickets to their favourite sporting and entertainment events,” comments John Pecman (pictured), the Canadian commissioner of competition. “To promote continued innovation and growth in the digital economy, it’s critical that consumers have confidence that the prices they see online are the ones they will pay.”

The bureau further warns that, although it “tries to settle matters without resorting to lengthy and costly court proceedings”, it “will not hesitate to take the necessary action to ensure compliance with the law”.

The Competition Bureau has previously taken successful legal action against car-hire companies it found guilty of drip pricing. Hertz and Dollar thrifty were fined C$1.25 million (US$968,000) in April, while Avis and Budget were forced to fork out C$3m (US$2.3m) the previous June.

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