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Booking fees in the dock in Germany

Verbraucherzentrale NRW, the Consumer Advice Centre of North Rhine-Westphalia (NRW) in Germany, has brought legal action against CTS Eventim over the ticket agency’s non-refunding of booking fees on events cancelled due to the coronavirus pandemic.

The Verbraucherzentrale sued Eventim in Munich after claiming to have received “massive [amounts of] complaints” from consumers in the state who received ticket money back less the booking fee. The cancelled shows were organised by a various promoters which had “commissioned Eventim to reimburse the ticket costs for cancelled events”, according to Verbraucherzentrale NRW, the North Rhine-Westphalian branch of Germany’s network of 51 consumer organisations.

The case reached the First District Court of Munich (Landgericht München I) on Wednesday 9 June, with both the Consumer Advice Centre and CTS Eventim claiming victory – the former because it secured a change to Eventim’s terms and conditions on ticket refunds, and the latter because the judgment confirmed that the promoter is responsible for overseeing ticket refunds, while it had dispensed with the T&Cs in question in October last year.

Wolfgang Schuldzinski, CEO of Verbraucherzentrale NRW, says the Consumer Advice Centre’s position is that, “in a large number of cases, Eventim wrongly withheld sums of money instead of repaying the entire ticket cost to consumers”.

The ruling confirmed that the ticket seller is “neither obliged to reimburse the ticket price nor the advance booking fee”

Following the court judgment, “if Eventim was commissioned to repay the ticket cost in the event of cancellations, those affected can now request Eventim to pay the outstanding amounts [the fees],” adds Schuldzinski. “This is a great success.”

CTS Eventim, meanwhile, welcomes the court judgement as a “clarification” that for postponed or cancelled events, “the organiser alone is always the contact point for ticket buyers” as opposed to the ticket agency.

According to Eventim, the Landgericht’s ruling confirmed that the ticket seller is “neither obliged to reimburse the ticket price nor the advance booking fee”, which is the responsibility of the concert organiser. CTS Eventim CEO Klaus-Peter Schulenbgerg, who says his company should never have been the defendant in the case, criticises the lawsuit as nothing more “PR for their own ends” by Verbraucherzentrale NRW.

Additionally, the court found that tickets for shows which have been postponed – as opposed to cancelled outright – remain valid for the rescheduled events, according to MusikWoche. In Germany, a ticket voucher scheme allows promoters to issue vouchers for rescheduled events in lieu of cash refunds.

Both sides have a month to appeal the court’s verdict, which is not yet final.

 

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Lessons from Viagogo v. the CMA

July 2019 saw two new developments in the ongoing dispute between the UK’s Competition and Markets Authority (CMA) and controversial secondary ticketing site Viagogo.

On 4 July, CMA announced that it intended to move forward with legal proceedings for contempt of court against Viagogo, alleging that it is failing to fully comply with a court order issued in November 2018.

Then, on 19 July, the High Court in England handed down its judgment in relation to separate proceedings under which Viagogo sought declarations from the court that it was complying with two separate provisions contained in November’s court order. The court ruled that Viagogo was complying with one of the provisions in the court order (in relation to its obligation to display information about ticket face values, as the court order specifically allowed Viagogo to display “through a suitable label or icon”) – but was not compliant with its obligation to disclose information relating to deadlines for refunds of claims in a way that did not force users to take action to access the information.

July’s action is the latest in a long line of developments stretching back to June 2016, when the CMA reopened the Office of Fair Trading (the CMA’s predecessor’s) investigation into the secondary ticketing market. Although the investigation focused on the practices of four secondary ticketing platforms (Get Me In!, Seatwave, StubHub and Viagogo) and whether they were compliant with consumer protection laws, Viagogo has faced the most CMA scrutiny. The CMA was able to secure a court order in November 2018, which forced Viagogo to “overhaul the way it does business” by mid-January 2019. At the end of January, CMA announced that it had serious concerns about Viagogo’s compliance with the court order (something it repeated in early March 2019).

As the 19 July judgment was fact-specific, it is difficult to determine whether this will have implications beyond the specific circumstances of the CMA’s dispute with Viagogo. However, the judgment did make clear that:

“The CMA will no doubt continue to monitor compliance with consumer protection laws in the secondary ticketing market… but other industries are also in its crosshairs”

Despite being a partial victory for Viagogo, the judgment does not appear to put an end to the dispute, as the CMA made clear that it would still be moving forward with legal proceedings for contempt of court against Viagogo in relation to Viagogo’s compliance with other parts of the order.

Even if the CMA’s legal action is not successful, it has successfully secured real change from the main operators in the secondary ticketing market place (albeit the change is just to bring those operators in line with the current law) and brought the issue to the attention of the wider public. This wider attention ­– as well pressure put on it by stakeholders in the live events industry ­­– is felt by many to be have been behind Google’s decision (on 17 July 2019) to remove Viagogo from its paid-for search results, which could result in a significant downturn in business for Viagogo.

The CMA will no doubt continue to monitor, and actively enforce, compliance with consumer protection laws in the secondary ticketing market, but other industries are also in its crosshairs. The CMA has recently announced two new actions; the first, in April 2019, is an investigation into Nintendo Switch, PlayStation and Xbox’s auto-renewal terms, and the second, in June 2019, is a programme of work aimed at tackling fake and misleading online reviews (initially focusing on Facebook and eBay).

While these investigations may not impact everyone directly, it is important for those working in consumer-facing industries to remember that, as competition authorities’ investigative eyes periodically shifts to new areas, the prudent approach is to ensure that you monitor your compliance with consumer laws and best practice.

 

Mike Jones is an associate at law firm Harbottle & Lewis.

Consumer groups welcome new CMA powers

The Competition and Markets Authority (CMA), the UK’s competition regulator, will be given new powers to impose fines on businesses that mislead or overcharge customers, under plans unveiled by the outgoing prime minister, Theresa May, yesterday.

The government is to consult on whether the CMA should be given new powers to decide itself whether consumer law has been broken without having to go through the courts, as is currently the case. New powers would enable the CMA to intervene earlier and more quickly to tackle violations and would include being able to directly impose fines on firms for poor business behaviour.

Adam Webb, campaign manager for FanFair Alliance, says the anti-touting organisation welcomes the proposed new powers, which would have been useful in dealing with rogue secondary ticketing sites such as Viagogo, against which the CMA was forced to obtain a court order to ensure compliance with consumer law.

“We would strongly support new enforcement powers for the Competition and Markets Authority to tackle businesses that continually break consumer law. In fact, they can’t come soon enough,” says Webb. “The absence of such powers has undoubtedly served to benefit companies like Viagogo that operate with a flagrant disregard for lawmakers, regulators and the public.

“Even against a tide of political and regulatory pressure, we still hold concerns that Viagogo is not yet fully compliant with terms of a court order issued over six months ago.”

“New enforcement powers … can’t come soon enough”

Caroline Normand, director of advocacy for the Consumers’ Association (Which?), also welcomes the proposals. She says: “Action to impose fines on firms that harm consumers through excessive charges, misleading offers and confusing practice can’t come soon enough and should act not only as a deterrent, but as an incentive to give consumers a fair deal.”

May’s plans, presented by business secretary Greg Clark, follow a so-called super-complaint by Citizens Advice which alleged that banks, insurers and internet companies were exploiting customer loyalty. The organisation, a network of 316 charities, complained last year that consumers were collectively being ripped off by more than £4bn a year for staying loyal to their broadband, mobile, home insurance, mortgages and savings, rather than switching, according to the FT.

“We also welcome much-needed new powers for the CMA and other regulators to finally clamp down on the ongoing bad practice of excessive, so-called loyalty penalties, which cost consumers billions of pounds a year,” comments Normand.

Outlining the proposals yesterday (18 June), May said: “For far too long, many big companies have been getting away with harmful trading practices which lead to poor services and confusion among customers who have parted with their hard-earned cash. The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules.

“It is high time this came to an end, and today we are confirming our intention to give much stronger powers to the CMA to strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off.”

 

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US Federal Trade Commission to look into online ticketing

The Federal Trade Commission is seeking input from the US entertainment industry and the general public ahead of a newly announced inquiry into the online ticketing market.

The FTC workshop, set for 29 March 2019, will explore “consumer protection and competition issues” related to buying tickets online – an area which has been a “frequent topic of consumer and competitor complaints”, according to the US competition watchdog.

The commission will tackle issues in both the primary and secondary markets, including transparency, lack of ticket availability and ticket bots (including the recently introduced BOTS Act) and pricing clarity, fees, speculative tickets and consumer confusion over primary vs secondary sellers, respectively.

“The commission has a strong interest in protecting consumer confidence in the online marketplace,” reads an FTC statement. “Issues that frequently arise in connection with online event ticket sales include practices that prevent consumers from obtaining tickets, mislead consumers about price or availability or mislead consumers about the entity from which they are purchasing.

“The workshop will discuss the current state of the online event ticket marketplace, shed light on industry wide advertising and pricing issues and explore ways to address deception beyond traditional law enforcement.”

“The workshop will … explore ways to address deception beyond traditional law enforcement”

US and global market leader Ticketmaster – whose parent company, Live Nation, was earlier this year accused by the US Department of Justice of using its monopoly power to pressure venues to use Ticketmaster – says it “welcomes and looks forward to participating in the FTC workshop on online ticketing in March 2019”.

“We encourage other ticketing companies to take part in educating consumers and lawmakers on the opportunities and challenges in the ticketing industry,” the company says in a statement, “and to join us in further action to improve the consumer ticket buying experience, including aggressive enforcement of the BOTS Act, the elimination of speculative ticket sales and restrictions on deceptive marketing and misleading ticketing URLs.”

Comments are invited from interested parties until 5 December 2018 by using this link. The FTC has also set up a dedicated email inbox, [email protected], for suggestions regarding workshop participants.

The FTC’s counterpart in Britain, the CMA, has been running an inquiry into secondary ticketing since 2016, and recently announced legal action against Viagogo for alleged breaches of consumer law.

 

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UK resale sites (with one notable exception) adopt new transparency rules

Three of the UK’s ‘big four’ secondary ticketing sites have formally committed to providing new information – including the identity of ticket sellers and the risk buyers will be turned away at the door – about all tickets resold on their platforms, the Competition and Markets Authority (CMA) announced this morning.

Following a nearly year-long investigation, the CMA said last November it would take consider taking legal action against websites it suspected of breaking UK consumer law, giving the sites in question a deadline of spring 2018 to get their houses in order.

According to the competition watchdog, Ticketmaster’s Seatwave and Get Me In! and eBay-owned StubHub UK have now agreed to ensure all ticket listings indicate:

The three sites have told the CMA they will make it mandatory for sellers to provide this information when listing a ticket, routinely carry out their own checks on primary ticket sellers’ websites about resale restrictions and “act promptly” if event organisers tell them information is missing.

The notable absence, unsurprisingly, is Viagogo, which the CMA says “has not, currently, agreed to make changes the CMA considers necessary. Therefore, the CMA has notified them it will take action through the courts, unless they promptly commit to satisfactorily addressing its concerns.”

“All secondary ticketing websites must play by the rules and treat their customers fairly if anything goes wrong”

CMA raided Viagogo’s offices, along with StubHub’s, last November as part of its investigation into the UK secondary ticketing market.

“Thousands of people use secondary ticketing websites to buy tickets for concerts, theatre and other events, so it’s crucial they are told what they are buying, from whom they are buying it and whether their ticket might not actually get them into the event,” says Michael Grenfell (pictured), the CMA’s executive director for enforcement, commenting on today’s announcement.

“We welcome the changes already made and new commitments we’ve been given by StubHub, Seatwave and Get Me In! to improve the information on offer, so that people can better judge whether they’re getting a good deal.

“But all secondary ticketing websites must play by the rules and treat their customers fairly if anything goes wrong. We take failure to comply with consumer protection law very seriously.

“So far Viagogo has failed to address our concerns, and we are determined to ensure they comply with the law. We are prepared to use the full range of our powers to protect customers – including action through the courts.”

FanFair Alliance, which campaigns against ‘industrial-scale’ ticket touting, calls the CMA announcement “vindication for the FanFair Alliance campaign to overhaul the online ticket resale market”.

“It’s disappointing that not all secondary website platforms have followed suit”

Campaign manager Adam Webb says: “UK audiences have been taken for a ride for too long by the biggest secondary platforms and the dedicated touts who fuel their business. They will now be forced to dramatically change their practices and provide proper transparency. This cannot come soon enough.

“It is disappointing, though hardly unexpected, that Viagogo continue to flout the law and mislead the British public. If they fail to follow their competitors and make similar commitments, then we expect to see prosecution for non-compliance at the earliest opportunity.”

In a rare showing of unity for the primary and secondary sectors, Fair Ticketing Alliance (FTA) – the recently launched association of “responsible UK ticket brokers” – also welcomes the changes, saying it’s “delighted” CMA enforcement action has led to reforms by three of the big four.

“The Fair Ticketing Alliance is delighted with the swift action of StubHub, Get Me In! and Seatwave to improve transparency for customers following action by the Competition and Markets Authority,” says FTA member Scot Tobias. “Undoubtedly, this will improve the experience of live music and entertainment fans using their sites and is precisely in line with what we have been calling for as brokers.

“It’s disappointing, however, that not all secondary website platforms have followed suit. Our members have stopped listing tickets on sites who do not comply with everything set out by the CMA. We urge those sites to do so immediately.

“We want consumers to be able to make clear, informed decisions when buying tickets on the secondary market, and we welcome the CMA’s view that these changes will help people pick the best deals for them. The FTA supports a secondary marketplace that offers choice, trust and flexibility and we believe that today’s announcement is another big step in the right direction.”

 

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Via-no-no: Ticketer fined in Italy, investigated in Spain

Viagogo has been slapped with another fine – this time to the tune of €1 million – by the Italian Competition Authority (AGCM) for alleged unfair commercial practices.

The Italian version of the ever-controversial secondary ticketing platform, Viagogo.it, is accused of hosting ticket listings that fail to display the face value of each ticket, the seat/row number and the total ticket price (after fees and charges) – all in violation of articles 20, 21 and 22 of the Italian consumer code.

The AGCM investigation dates to April 2017, when Swiss-based Viagogo and three other resale sites were fined a collective €700,000 for similarly failing to provide complete ticket information to consumers. At the time, the company was given sixty days to comply with consumer law – and claimed it would do so, according to AGCM – but a year later, many consumers and associations are still complaining of opaque ticket pricing and unclear information on seating location, leading to the €1m fine.

Although a blow for Viagogo, it should be noted that CTS Eventim’s TicketOne recently successfully appealed a €1m fine of its own, for allegedly passing tickets directly to secondary sites, and will be reimbursed by AGCM.

Viagogo is accused of violating the Italian consumer code

Almost concurrently with the AGCM action, Viagogo has also come under fire in Spain, with the Valencian public prosecutor’s office announcing it has opened an investigation into whether price gouging on Viagogo.es for U2’s two shows in Madrid in September constitutes “abusive conduct” under Spanish law.

According to 20 Minutos, the Provincial Prosecutor’s Office (Fiscalía) of Valencia has received several complaints from consumers after U2 tickets sold out “in a few minutes” and were listed on Viagogo for up to €1,500 shortly after.

Concerns over ticket prices for U2’s 2018 Experience + Innocence European tour have similarly spurred authorities in the Netherlands into action, with Dutch culture minister Ingrid van Engelshoven announcing last month she is to consult the local live music business on potential regulation of the secondary ticket market.

 

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UK Trading Standards arrests four in anti-tout raids

British consumer protection body National Trading Standards has made four arrests as part of its investigation into the business activities of large-scale secondary ticket sellers.

The existence of the investigation, which began in April 2017 and focuses on “businesses that buy and sell tickets in bulk”, was revealed last month when news broke that competition watchdog CMA had raided the London offices of StubHub and Viagogo. It is believed to be codenamed ‘Operation Electra’.

The arrests are linked to alleged breaches of the Consumer Protection from Unfair Trading Regulations act of 2008, the UK version of the EU Unfair Commercial Practices Directive, which seeks to protect consumers from “unfair, misleading or aggressive selling practices”.

While National Trading Standards has not named the four individuals, or the companies they represent, Viagogo in particular has been criticised for masquerading as an ‘official site’ for concert tickets, which could potentially breach the 2008 legislation. It was also recently criticised by French authorities for allegedly misleading consumers on the number of tickets available by suggesting they are about to sell out.

“Yesterday (Tuesday 12 December), officers from National Trading Standards conducted raids at a number of properties across the UK,” a National Trading Standards spokesperson says in a statement. “These raids are part of an ongoing investigation looking into unfair practices in the secondary ticketing market and particularly the practices of businesses that buy and sell tickets in bulk.

“These raids are part of an ongoing investigation looking into unfair practices in the secondary ticketing market”

“A total of four properties were raided and four people were arrested under suspicion of breaches of the Consumer Protection from Unfair Trading Regulations 2008. In addition to the arrests, a range of equipment, including computers, mobile phones and storage devices, have been seized as evidence.

“The raids, led by the National Trading Standards eCrime Team, were supported by local police, specialist police officers and the North East Regional Asset Recovery Team.

“National Trading Standards has also been working closely with the Competition and Markets Authority, which announced on 28 November that it will take action against secondary ticketing websites suspected of breaking consumer protection law.”

National Trading Standards declined to comment further.

“FanFair Alliance welcomes what sounds like a comprehensive raid by National Trading Standards,” reads a statement from the anti-touting campaign group. “With new legislation due for enforcement in 2018, and the Competition and Markets Authority promising action against secondary ticketing sites that break consumer protection laws, this should mark the beginning of a long-awaited clean-up of this market.”

 

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CMA to take action against ‘law-breaking’ secondaries

The UK’s Consumer and Markets Authority (CMA) is to take ‘enforcement action’ against ticket resale websites suspected of breaking consumer protection law.

Following an almost year-long investigation, which included the raiding of Viagogo and StubHub’s UK offices, the CMA announced this morning it has “identified widespread concerns about the information people are given” during the ticket-buying process, and has gathered evidence it believes reveals numerous breaches of consumer law. The consumer watchdog will therefore be “raising its concerns” with the websites concerned and requiring them to take action – including listing seat numbers, any restrictions on resold tickets and the identity of the seller – to comply with the relevant legislation.

The CMA has also, in light of new information, widened the scope of its original investigation to include speculative selling, where sellers list tickets they do not yet own; ‘pressure selling’, wherein sites such as Viagogo rush customers by implying tickets are about to sell out; whether event organisers are passing tickets directly to secondary sites; and the difficulties experienced by many customers in reclaiming money under a website’s guarantee.

IQ understands the sites in question have a deadline of spring 2018 to comply or risk legal action.

“We will use the full range of our powers to get the right outcome for these sites’ customers”

CMA chief executive Andrea Coscelli (pictured) says: “Secondary ticketing websites can offer an important service by allowing people the chance to buy tickets at the last minute or giving them a chance to resell tickets they can no longer use. But our investigation has identified concerns that the law protecting consumers is being broken.

“Thousands of people use these sites and they have a right to know if there is a risk that they will be turned away at the door, who they’ve bought their ticket from or exactly what seat at the venue they’re getting for their money.

“We are putting our concerns to these websites and will be requiring the changes necessary to tackle them. We will use the full range of our powers to get the right outcome for these sites’ customers – including taking action through the courts if needed.”

Additionally, the CMA says it will be acting to address a failure by one website to comply with commitments it had given previously to improve the information provided about listed tickets.

“It is has taken far too long to get here, but a sword of Damocles now hangs over the entire secondary market”

While the organisation makes clear it has “not yet reached a final view” on whether the practices it has identified definitely breach consumer protection law – something only a court could decide – anti-touting group FanFair Alliance welcomes the crackdown, saying it “justifies everything FanFair Alliance supporters have campaigned for”.

“Alongside work from the Advertising Standards Authority and National Trading Standards, we are especially pleased the CMA will expand the scope of their investigation,” reads a FanFair statement. “Beyond suspected breaches of consumer protection law, we believe the largest ticket resale platforms are riddled with bad practice, including speculative ticket listings, pressure selling and collusion with large-scale ticket touts.

“It is has taken far too long to get here, but a sword of Damocles now hangs over the entire secondary market. If they fail to deliver root-and-branch reforms, we expect the largest resale platforms to face significant consequences.”

Alex Neill, managing director or home products and services at consumer advocacy group Which?, adds: “With people increasingly finding that they have to buy tickets through secondary sites, it’s right that the competition authorities are taking action against companies that aren’t playing by the rules. Our research has found many websites breaking consumer law by not listing the face value of, or restrictions on, tickets as well as key information, such as block, row and seat numbers.

“It is particularly encouraging to see that the CMA have broadened their investigation to span additional issues such as pressure selling and speculative selling”

“This action must now lead to much greater transparency so that consumers have a better chance of getting the best tickets for popular events.”

“We welcome the CMA’s move to deepen their investigation into the secondary ticketing market, including commencing action against one site,” comments Richard Davies, founder of face-value ticket exchange Twickets. “It is particularly encouraging to see that the CMA have broadened their investigation to span additional issues such as pressure selling and speculative selling, which have plagued consumers for far too long.

“We look forward to seeing further action being enforced to ensure that fans are better protected against the unscrupulous practices of touts.”

Vibe Tickets founder and MD Luke Massie says: “The secondary ticketing market is fundamentally broken due to the lack of transparency. This is an ongoing issue that is costing genuine fans and threatening the live music industry.

“The only way to tackle this issue is to create a fully transparent community, where all users are verified and genuine fans are free to speak directly to other like-minded individuals, negotiate a fair price for a ticket and purchase them online in a safe and secure environment. The average £1m worth of transactions that occur on the Vibe platform each month show that this is what fans want, and it’s encouraging that the CMA is forcing other industry players to follow suit.”

 

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Dutch ticketers comply with drip pricing ban

Tickets sold online in the Netherlands are now listed with all ‘unavoidable’ costs, such as booking and processing fees, listed upfront, following a successful intervention by the Authority for Consumers and Markets (ACM).

ACM in July warned the country’s leading ticket agencies – which, according to the International Ticketing Yearbook 2017, are Ticketmaster, Eventim, Ticketpoint and Paylogic – that all extra costs must be listed in the ‘base price’ of the ticket, giving them until 1 October to comply. ACM’s counterpart in Canada, the Competition Bureau, followed suit the following week, warning sellers they could face court action unless they ceased drip pricing online.

Under Dutch law, ‘avoidable costs’, such as optional extras or upgrades, may be displayed at a later stage in the booking process.

“ACM has established that the sector has turned a corner,” comments Bernadette van Buchem, director of ACM’s consumer department. “Trade organisations have played a positive role in that process.

“Consumers are now able to see at the start of the booking process what a ticket will cost them, including all unavoidable costs. This will enable them to compare prices better. Providers are able to compete more fairly on price.”

 

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Now Canada warns ticketers over ‘drip pricing’

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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