CMA investigations into secondary ticketing websites who sell on tickets for inflated prices

First published by Admin on June 02, 2017 in the following categories: Latest and tagged with cma

Back in 2012, the Office of Fair Trading (OFT) was prompted to open investigations amidst concerns that secondary ticketing websites were buying mass quantities of tickets for concerts, sports games and other performances, to sell them on at a higher price.

These websites have the disposable income to buy a large percentage of available tickets so that the remaining tickets being sold at retail price will run out quickly. As a result, consumers may be left with no choice but to buy them from the secondary ticketing website at a higher cost.

This can be anti-competitive behaviour as it restricts the market for the consumer and inflates prices. Instead of looking at various ticket sellers and choosing the best ticket by comparing the seats and dates with the price, consumers are left with a significantly inflated price.

Various ticketing websites to blame

In March 2015, the CMA narrowed it down to 4 specific websites that were all engaged in the illegal practice. GET ME IN!, Seatwave, StubHub and Viagogo, were all found to be taking advantage of consumers by hiking up the prices. When consumers see they are the only available vendors of tickets, they may be duped into thinking the ticket price advertised is fair. Whilst some consumers are aware of the hiked up prices, they pay them anyway in the understanding that the websites providing this service need to make commission. But many customers are essentially paying more in desperation to get tickets for events. How is that fair?

Lots of unhappy customers

Some unhappy customers have taken to forums to share their horrendous experiences. One Trip Advisor review slammed Seatwave for selling them front row tickets for hundreds of pounds, only to find out on the day of the match that they were almost on the back row. At normal retail value, the seats they ended up with would have only cost them a third of what they paid. In this decade, do we really need a middle man for tickets? These secondary tickets are arguably creating their own supply system when, if they were removed, consumers could simply purchase tickets at face value.

Undertakings issued by CMA

The Competition and Markets Authority (CMA) have various methods of sanctioning for non-complying companies. Whilst a common penalty is to issue a fine, sometimes it is more appropriate to issue an undertaking; whereby a company promises to take certain action in order to comply with Competition regulations. In this case, the 4 secondary ticketing platforms named above provided undertakings that they would provide more information to users of their websites.

The CMA have continued to monitor whether the action was enough and have asked for users to send over evidence of their experience in purchasing tickets through them.

A separate review

Recently, Professor Mike Waterson of the University of Warwick produced an independent review of the issue. The professor of economics found that the secondary ticketing website still had a way to go in order to be compliant.

Professor Waterson made a number of recommendations for improvement. These included providing the consumer with information like the face value of the ticket, where the seats were, and if there were any restrictions that came with the ticket (for example if the ticket holder needs to be over 15); thus complying with Consumer Rights Act 2015. Overall, his main advice was to increase transparency.

Both the Government and the CMA have reviewed Professor Waterson’s report and are taking on board his recommendations. The CMA will continue to obtain relevant information to see if these secondary ticketing websites have broken the law. The Authority has the legal power to take action in enforcing compliance in the name of protecting consumer protection laws. The live events industry who are the primary sellers of these tickets are encouraged to be vigilante in looking for individual people or companies looking to buy mass quantities of tickets without the intention of attending.