A new proposed class action out of California’s Central District alleges that while the defendants claim to maintain a limited number of tickets per purchase to keep scalpers from gaming the market and snatching up large quantities for resale, Ticketmaster and its parent company, Live Nation, have harmed consumers by shorting event tickets on the primary market only to resell them for a higher price through their “verified resale program.” According to the lawsuit, the defendants’ “verified resale” program is nothing more than a way for Ticketmaster to generate more money for itself through additional fees. In effect, Ticketmaster’s “verified resale” program allegedly provides the company with a second cut on event tickets, which the lawsuit claims amounts to more money than the defendants make on primary market sales.
The 22-page complaint includes one scenario that shows what Ticketmaster typically stands to earn on sales through its in-house secondary market as opposed to the primary market:
“For example, Ticketmaster collects $25.75 in fees on a $209.50 ticket on the initial sale. When the same ticket is posted for resale [on] Ticketmaster’s site for $400, Ticketmaster stands to collect an additional $76 on the same ticket.”
According to the suit, Ticketmaster’s resale practices have facilitated scalpers’ efforts to ignore the company’s rules against using bots to scoop up mass quantities of tickets. In fact, the case continues, Ticketmaster, through its professional reseller program TradeDesk, has incentivized scalpers to obtain large quantities of tickets because the resellers get a reduction in the commission fee they must remit back to Ticketmaster.
All told, Ticketmaster has intentionally created a shortage of tickets in the primary market, the suit argues, which has, in turn, inflated prices and boosted fees reaped by the company in the secondary market.