LegiStorm

Summary:

Each year, millions of Americans purchase tickets for live entertainment events, such as concerts, theatrical performances, and sporting events. Tickets for live events initially are sold in the primary market, in which firms that provide ticketing services (i.e., ticketers) work directly with venues, promoters, producers, sports teams, and other entities to sell tickets to consumers. Tickets for some live events also are available in the secondary market, in which individuals who purchased tickets in the primary market can resell their tickets instead of using them. Individuals selling tickets in the secondary market can include consumers who cannot or no longer wish to attend the event, as well as ticket brokers who purchase tickets in the primary market with the intention of reselling them in the secondary market for a profit. Although tickets in the primary market are often priced to maximize revenue based on supply and anticipated demand, tickets for some events are purposefully set below the market-clearing price, allowing individuals to resell them with a significant markup. For some events, ticketers might provide the ticket price, without fees and taxes, at the beginning of the transaction and in advertisements, noting that fees and taxes may apply. These ticketers may have a competitive advantage if they are perceived to offer tickets at a lower price than a competitor providing the total ticket price, including fees (i.e., all-in pricing). Some ticketers operate in both the primary and secondary markets, and some are vertically integrated (i.e., operate in multiple components of the supply chain) in other ways, such as operating as a ticketer while providing promotion services for artists or owning a sports franchise. Some ticketers have multiyear exclusive contracts with venues, promoters, sport franchises, and other entities in the supply chain. Federal oversight of tickets for live events involves executive actions that result in voluntary commitments from companies and enforcement of legislation specific to event ticketing. For example, on June 15, 2023, President Biden met with several ticketing companies (including Live Nation Entertainment, SeatGeek, and others); those that did not provide all-in pricing at the time of that meeting made commitments to do so. The Better Online Ticket Sales Act of 2016 (BOTS Act; P.L. 114-274) prohibits individuals from circumventing a ticketer’s system to purchase more tickets than permitted by the ticketer. The BOTS Act is enforced by state attorneys general (AGs) and the Federal Trade Commission (FTC). The FTC brought its first cases against three ticket brokers for violating the act in 2021. Federal agencies enforce legislation that is applicable to various industries including event ticketing. For example, the FTC protects consumers by prohibiting “unfair or deceptive acts or practices in or affecting commerce” for certain sectors, and the FTC and the Antitrust Division of the Department of Justice (DOJ) enforce antitrust laws. The FTC has taken action against ticketers for engaging in deceptive tactics and proposed a trade regulation rule that would require all-in pricing; the proposed rule would likely apply to live event ticketers. The FTC held a virtual informal hearing on its proposed rulemaking on April 24, 2024. Additionally, on May 23, 2024, DOJ and 30 AGs from states and the District of Columbia filed a lawsuit against Live Nation Entertainment and its subsidiary Ticketmaster for violating the Sherman Act and state antitrust laws. When Live Nation and Ticketmaster merged in 2010 to create Live Nation Entertainment, both companies entered a consent decree with DOJ in which they agreed to certain requirements to address concerns about the effect of the merger on competition. The consent decree was modified in 2020. In the May 2024 lawsuit, the plaintiffs allege that Live Nation Entertainment and Ticketmaster have engaged in anticompetitive conduct that violates the 2020 revised consent decree in addition to engaging in anticompetitive conduct unrelated to the consent decree. The House passed the Transparency in Charges for Key Events Ticketing Act (TICKET Act; H.R. 3950) on May 15, 2024. This bill contains several provisions related to ticketers, such as requiring all-in pricing, prohibiting the sale of speculative tickets unless certain requirements are met, and requiring a full refund or a replacement ticket for cancelled events. Other ticketing-related bills introduced in the 118th Congress variously include the following provisions: (1) requiring all-in pricing; (2) implementing requirements related to the supply chain; and (3) implementing requirements for tickets, such as prohibiting the sale of speculative tickets, prohibiting the sale of nontransferable tickets, and requiring ticketers to provide a full refund for a cancelled or postponed event, with exceptions. Each of these provisions might have different effects on event ticketing. As Congress considers whether to pursue legislation related to event ticketing, it might consider whether legislation is needed, whether actions by federal agencies would address some congressional concerns, and what changes Congress might implement in event ticketing—which could range from increasing transparency to implementing broader structural changes to the industry—and the potential effects.