TM promises review as TradeDesk lawsuits mount
Ticketmaster is facing multiple class-action lawsuits and a grilling by US senators as the fall-out from last week’s Toronto Star report continues.
The world’s largest ticket seller was accused by the Star, which conducted a joint investigation with CBC News, of enabling professional resellers to bulk-buy primary inventory and then sell it on the secondary market using its TradeDesk platform, with the covert approval of Ticketmaster employees. The company described the allegations as “categorically untrue”, denying it has “any program[me] in place to enable resellers to acquire large volumes of tickets at the expense of consumers”.
According to the Star, Canada’s Merchant Law Group – which announced in January it is suing Ticketmaster/Live Nation over alleged ‘drip fees’ levied on tickets – is now expanding the suit to include the TradeDesk allegations, while south of the border Hagens Berman is also inviting affected consumers to join a class action seeking damages over what it calls “Ticketmaster’s TradeDesk scalping scheme”.
US senators Jerry Moran and Richard Blumenthal – chairman and ranking member of the US Senate commerce subcommittee on consumer protection, product safety, insurance and data security, respectively – are also seeking answers from Ticketmaster, writing to Live Nation CEO Michael Rapino for clarification on the “serious” allegations made in the piece.
“Allegations of the harms to consumers made in this piece are serious and deserve immediate attention”
“CBC News reported that Ticketmaster […] recruits and employs professional ticket scalpers to circumvent the ticket purchasing limits on its own primary ticket sales platform in an effort to expand its ticket resale division,” the senators write. “According to the article, Ticketmaster utilizes [sic] a professional reseller program called TradeDesk, which provides a web-based inventory for scalpers to effectively purchase large quantities of tickets from Ticketmaster’s primary ticket sales website and resell these tickets for higher prices on its own resale platform.”
“Citing examples of TradeDesk users moving up to several million tickets per year, the allegations of the harms to consumers made in this piece are serious and deserve immediate attention,” they add.
Moran and Blumenthal have given Rapino a deadline of 5pm on 5 October to respond.
In a statement issued yesterday, Ticketmaster North America president Jared Smith again denied claims the company “has a secret programme to collude with scalpers at the expense of fans”, saying reports to the contrary are based on a “limited understanding of a Ticketmaster product called TradeDesk”.
“Let me be absolutely clear and definitive that 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. Period,” says Smith (pictured). “We would never make anything like that, which would go against the very core of who we are and what we do. And that’s simply not what TradeDesk is.”
“Ticketmaster has never had any programme or product that helps professional resellers gain an advantage to buy tickets ahead of fans”
He continues: “TradeDesk is Ticketmaster’s version of an inventory management tool for professional ticket resellers (brokers). It is neither secret nor unique to Ticketmaster. Like StubHub’s product called Ticket Utils or Vivid Seat’s Skybox, TradeDesk is used by brokers to manage tickets they already have. All of these tools organise a broker’s ticket inventory so the tickets can be priced and listed for sale on various ticket marketplaces, not just on Ticketmaster as was suggested. These tickets could have come from Ticketmaster, from other ticketing systems or could have been purchased directly from a team, a venue or another reseller. TradeDesk is overwhelmingly used to manage season tickets for sporting events.
“TradeDesk is not a scheme to help Ticketmaster sell tickets twice. In fact, less than 4% of the concert tickets we sell each year are listed and sold again on Ticketmaster. What does make TradeDesk unique, however, is that it offers an integration with Ticketmaster for validating tickets that are uploaded to it. As a result, our integrated marketplace is fundamentally different than all the others – safer, more transparent and where each resale ticket is clearly identified and required to be 100% verified before ever being listed for sale.
“We are aware that many people don’t believe we should be working with ticket brokers at all. But as long as there is a massive disconnect between supply and demand in live event tickets, there is going to be a secondary market. Choosing not to participate would simply push resale back to those who care less than we do about artists and fans. The reality is, engaging brokers with a safer version of tools they could get from many other ticketing companies reduces fraud across the overall ticket market.”
Smith adds that Ticketmaster is “now in the process of reviewing all of our Ticketmaster accounts and expanding our review process to ensure all customers are in compliance with our terms of service”, which set out a limit on the number of tickets that can be purchased by any person, as well as prohibiting the creation of multiple accounts to get round the restrictions.
CBC News details Ticketmaster investigation
A joint undercover investigation by CBC News and the Toronto Star has alleged that Ticketmaster is enabling professional resellers to list and sell inventory via its purpose-built TradeDesk platform.
In July, two journalists posing as scalpers attended Ticket Summit 2018 – a convention for ticket resellers – at Caesars Palace in Las Vegas. There, employees from Ticketmaster’s resale division were filmed recruiting resellers and promoting TradeDesk, which allows the bulk uploading and listing of large quantities of tickets.
The CBC story comes just weeks after Ticketmaster announced that it was closing down its European resale operations including Get Me In! and Seatwave.
CBC reports that some brokers using Ticketmaster’s software had “literally a couple hundred of accounts,” to “work around” ticket limits on shows, while activity on TradeDesk was not subject to the same policing or checks by the company’s “buyer abuse” division.
During a conference session titled “We appreciate your partnership”, CBC reports that Ticketmaster Resale director, Casey Klein, described TradeDesk as “the most powerful ticket sales tool. Ever.”
“We’re not trying to build a better mousetrap”
A similar message was supposedly delivered in March during an online video demonstration. CBC reports a Ticketmaster employee as having said: “We’ve spent millions of dollars on this tool. The last thing we’d want to do is get brokers caught up to where they can’t sell inventory with us… We’re not trying to build a better mousetrap.”
CBC News has also published an article investigating sales for a Bruno Mars show in Toronto this weekend, which argues that Ticketmaster is incentivised to resell tickets because it collects fees on both the primary and secondary transactions.
UPDATE 21 Sept: After issuing an initial statement to the CBC News, Ticketmaster has since categorically denied the claims. The full statement is below:
“It is categorically untrue that Ticketmaster has any program in place to enable resellers to acquire large volumes of tickets at the expense of consumers. Ticketmaster’s Seller Code of Conduct specifically prohibits resellers from purchasing tickets that exceed the posted ticket limit for an event. In addition, our policy also prohibits the creation of fictitious user accounts for the purpose of circumventing ticket limit detection in order to amass tickets intended for resale.
“A recent CBC story found that an employee of Ticketmaster’s resale division acknowledged being aware of some resellers having as many as 200 TradeDesk accounts for this purpose (TradeDesk is Ticketmaster’s professional reseller product that allows resellers to validate and distribute tickets to multiple marketplaces). We do not condone the statements made by the employee as the conduct described clearly violates our terms of service.
“The company had already begun an internal review of our professional reseller accounts and employee practices to ensure that our policies are being upheld by all stakeholders. Moving forward we will be putting additional measures in place to proactively monitor for this type of inappropriate activity.”