Class action: Ticketmaster double dips on ticket sale fees, encouraging online ticket resale scalping

By Scott Holland | Oct 3, 2018

Ticketmaster is facing a federal class action complaint over a practice that allegedly incentivizes online scalpers.

Salvatore Vaccaro filed a complaint Sept. 26 in federal court in Chicago, accusing Ticketmaster of violating the Illinois Consumer Fraud and Deceptive Business Practice Act and the Illinois Uniform Deceptive Trade Practices Act. According to the complaint, Ticketmaster sells, on its own secondary exchange, the same tickets it initially sold to resellers on the main website, “thereby collecting multiple commissions per ticket, and even apparently creates and distributes ‘doubledip bots’ to resellers to allow them to purchase or repost these tickets automatically which ultimately artificially inflates the prices to consumers.”

According to the complaint, Vaccaro “was forced to purchase tickets from a second hand ticket exchange” several times in the past three years, including at the Gold Coast Tickets and Stub Hub websites.

Vaccaro said Ticketmaster, since merging with Live Nation in 2010, “exerts an overwhelming dominance over all aspects of the live event market.” His complaint cited testimony from the companies’ merger hearings regarding monopoly concerns, as well as an April 2018 New York Times article with similar comments from the New York Attorney General’s Antitrust Bureau.

According to the complaint, Ticketmaster’s scheme works by directing most primary market sales to resellers, then creating the platforms resellers favor for moving their own inventory. This drives up demand for events — “encouraging artificial ‘sold out’ events — and allows Ticketmaster to collect commissions each time the ticket is sold.

Further, Vaccaro said “Ticketmaster has actually provided automated programs to ticket resellers in order to allow them to purchase tickets from Ticketmaster or immediately post those tickets to Ticketmaster’s own secondary exchange for resale faster and in automated fashion.”

He alleged that system exists in part to incentivize resellers to use Ticketmaster’s secondary market websites rather than competing secondary exchange platforms. He further said the company “sabotages its Verified Fan program, which it publicizes as a means to provide special advance tickets to a special set of consumers with codes, by releasing the same tickets for sale simultaneously at the box office, without requiring any special code, and with full knowledge that ticket resellers will staff the box office to purchase the tickets immediately.”

The complaint said many Ticketmaster events have terms of purchase limiting resale to Ticketmaster’s exchanges, and said event “venues can share in these double-dip commissions, depending on the provisions in their deals with Ticketmaster.” He also said Ticketmaster expedites the issuance of final tickets with bar codes when purchased through its own secondary exchange and does not do the same for competing resale platforms.

“Ticketmaster’s outsized profits are built on using its excessive market power to stifle competition and unfairly exact additional fees to line its pockets,” according to Vaccaro’s lawsuit.

The class would include anyone in Illinois who bought tickets off a secondary exchange, when the tickets first were offered on Ticketmaster, from Sept. 26, 2015, through Sept. 26, 2018.

In addition to a jury trial, Vaccaro seeks compensatory, consequential and punitive damages, as well as legal fees and court costs.

The attorneys representing Vaccaro, and seeking to represent the class, are Blaise & Nitschke, of Chicago. They seek to collect as much as a third of whatever damages the court awards.

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Organizations in this Story

Blaise & Nitschke PC Ticketmaster U.S. District Court for the Northern District of Illinois

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