Primary ticket issuers, such as Ticketmaster, are not sharing information needed to follow the law, resale platforms StubHub and SeatGeek say.Phelan M. Ebenhack/The Associated Press
Facing thousands of dollars in fines for violating Ontario’s new ticket price caps, resale platforms StubHub and SeatGeek say primary ticket issuers, such as Ticketmaster, are not sharing information needed to follow the law. Industry watchers, meanwhile, have cast doubt on their claims.
The Ontario government fined ticket reseller SeatGeek Canada $25,000 in August for allegedly flouting a price cap law while StubHub Canada Ltd. was fined $20,000 this week. The new rules, introduced in April, ban reselling tickets for more than the original total price paid to the primary seller.
StubHub spokesperson Jack Sterne said the company “strongly disagrees” with the fines being imposed and plans to appeal the decision.
“We are upholding our responsibility as best we can,” he said, despite the “law’s silence” on core issues, like how a vendor can actually verify the original price of a ticket.
SeatGeek’s vice-president of government affairs, Joe Freeman, said responsibility for sharing the face value of a ticket sits with the primary ticket issuer. “Ticketmaster has not been forthcoming with it,” he said.
Ministry of Public and Business Service Delivery and Procurement spokesperson Cristian Buzo Tingarov did not respond to questions on how the government is addressing gaps in the legislation shared by resellers. “The government continues to take action to ensure all ticket sellers comply with our legislation,” he said.
While some industry watchers say the resellers have a point, the success of face value resale platforms in other jurisdictions suggests when there’s a will there is a way for them to check original selling prices.
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It does raise the question “how do you actually assess the price?” said Stephen Zolf, who co-leads the Competition, Antitrust and Foreign Investment Group and Sports and Entertainment at Aird & Berlis LLP. “They were not party to that original transaction.”
New York-based artist manager and live events technology consultant Randy Nichols, however, said if challenges exist in verifying the original price, they’re ones the platforms are eager to embrace. “It’s not difficult in the sense that it’s technologically hard.”
Resale platforms have the ability to monitor seller behaviour, such as the frequency of transactions, and use technology to identify large-scale operations whose activity on the platform can give off signals of abuse, Mr. Nichols said.
Smaller resale platforms such as CashorTrade and Tixel have long required customers to submit receipts or other documentation before listing tickets, and later developed partnerships with larger ticketing companies, including Ticketmaster, that provided their verified pricing information.
Ticketmaster Canada spokesperson Shabnum Durrani said “every ticket sale comes with a receipt that reflects the purchase price” and that the face price is also displayed directly on digital tickets.
“Any suggestion that this information cannot be made available to resale platforms is incorrect,” she said.
A StubHub spokesperson said a PDF of a receipt can be easily doctored with AI or software to change the price.
But Mr. Nichols said the small barriers such as requesting sellers to upload receipts – something that StubHub and Seatgeek generally don’t do – also have the simple benefit of adding friction that can help weed out at least some bad actors.
The concern is not a fan making “a couple of extra dollars” when they can’t attend a high-demand event, Mr. Nichols said. “What we want to disincentivize is $1-billion businesses investing in buying and selling tickets at scale.”
Brando Rich, the co-founder and CEO of CashorTrade, a face-value ticket resale platform based in Burlington, Vermont, said his company has been verifying ticket prices by examining receipts and metadata, using AI and by building out a crowd-monitored “member police” platform.
“Users actually have the ability to flag a post that violates the policy,” he said.
Most recently, his platform integrated with Ticketmaster along with five other primary ticketing platforms to get the original sale information by connecting their Application Programming Interfaces (APIs), a technical door between two services.
But while Mr. Rich supports ticket price caps, he said there needs to be more margin to support the resale market and competition. The company makes money by charging buyers a 10 per cent transaction fee on ticket purchases and through paid memberships for frequent users.
Ontario’s ticket price cap has zero wiggle room for margin, though an initiative proposed by the previous Liberal government in 2018 would have limited resale prices at 50 per cent above the tickets’ original face value. In the U.S., jurisdictions such as Washington, D.C., and California have proposed capping live event ticket resale prices at a maximum of 10 per cent above face value.
“Even 10 per cent makes it tough for a product or service to thrive,” Mr. Rich said. “There are a lot of technical pieces under the hood that require resources.”
Jake Farbman, an entertainment lawyer at Ferrara & Pisarek in Nashville and a former touring musician, said rules imposed only on the secondary market raise the risk of giving more market share to primary ticketing giants if they aren’t accompanied by mandatory price transparency or data-sharing requirements.
“A regulation intended to protect consumers could inadvertently make it more difficult for independent resale platforms to compete.”