FTC Fines Three Ticket Scalping Companies For Illegally Using Bots (theverge.com) 53
The Federal Trade Commission issued multimillion-dollar fines against three bot-powered ticket scalping operations. The Verge reports: The FTC says these organizations bought over 150,000 event tickets over the past four years, nabbing them with automated tools that evaded online purchasing limits. After reselling these tickets for an estimated $26.1 million, they've been accused of breaking a 2016 anti-bot law -- the first time this law has been applied.
Regulators reached a proposed settlement with the ticket selling groups, including $31.6 million in fines. However, most of these fines were suspended because of an inability to pay. The three groups will pay a total of $3.7 million instead, and they'll have to maintain records demonstrating their future compliance with the law. The settlement must still be approved by a judge. [...] While the complaints don't specify which shows the scalpers were targeting, they note that the list includes many sporting events and other performances, including Elton John concerts.
Regulators reached a proposed settlement with the ticket selling groups, including $31.6 million in fines. However, most of these fines were suspended because of an inability to pay. The three groups will pay a total of $3.7 million instead, and they'll have to maintain records demonstrating their future compliance with the law. The settlement must still be approved by a judge. [...] While the complaints don't specify which shows the scalpers were targeting, they note that the list includes many sporting events and other performances, including Elton John concerts.
Meh. (Score:3)
This bullshit is the main reason I no longer go to shows. That, and even without the scalpers, the prices are obscene.
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This bullshit is why i'm revoking my membership, /. is now a steaming pile of advertising/paid shill shite & non stories.
After 20+ years, I will never come back.
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I for one am also fed up with all the FTC adverts.
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Maybe you're just going to the wrong ones. It's been a few years since I've went, but prior to 2015 I was going a few times a year and never paid more than $20-30 for the ticket. The $8 beers were lame, but I'd usually forgo those for the tabs in my sock.
I like Elton John, but seeing him decades past his prime and from a mile away doesn't sound any better than the shows I went to, even if they were priced the same.
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Well that sucks (Score:4, Insightful)
including $31.6 million in fines. However, most of these fines were suspended because of an inability to pay. The three groups will pay a total of $3.7 million instead,
In other words, the scalpers totally got away with it, and will just open up new non-monitored companies to do the exact same thing all over again.
Until they go with death penalty over this, you can expect a repeat of this story countless times...
Re:Well that sucks (Score:4, Insightful)
That depends. This doesn't say anything about how much they actually profited. For example, if they bought $22.4 million worth of tickets and sold them for $26.1 million, then they would break even, technically getting away with it as they wouldn't be out any money, but they didn't gain anything either. We just don't have enough information to know.
It's also suspended so they can get charged the full amount if it is later found that they misrepresented their financial condition.
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If the FTC itself is issuing the fine, its more than likely a Civil rather than Criminal offense, meaning that it wouldn't qualify for civil forfeiture.
What would have been preferable would have been if they just skipped using the law and instead pushed for a wire fraud charge. If the ticket sellers had a no bors rule, then arguably the scalpers where doing deceptive behaviors to gain a financial reward. Thats a textbook fraud case. And fraud is *totally* a crime and therefore potentially eligible for civil
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This doesn't say anything about how much they actually profited. For example, if they bought $22.4 million worth of tickets and sold them for $26.1 million
Typically scalped tickets go for 50% or more, so...
You can also get a rough idea even just from the summary - over 150k tickets sold for an estimated 26 million. that is around $173/ticket, given not a lot of tickets are nearly the expensive we can be pretty sure they had a very healthy profit margin on those tickets.
Even if they "only" made a few millio
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Well, it does say 150k tickets. That comes to about $170 each. I'd say that's probably a 50-100% markup for most events. So their gross profit was probably something like 9-13 million.
Really? (Score:3, Insightful)
However, most of these fines were suspended because of an inability to pay.
This turns my stomach. I remember being in traffic court one day. I waited my turn and watched people go to jail because they couldn't pay the fines.
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THIS! Actual human beings get jail if they can't pay (and courts bend over backwards to not call it debtor's prison). They certainly do not get a break big enough to make re-offending profitable.
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How many places have the money to jail people for not being able to pay petty fines?
AFAIK, the jail time is really only given out to people who don't pay a fine and ignore the warnings and wind up with a bench warrant, possibly getting jailed for contempt of court if goes on long enough. I think if you made an effort to deal with a fine even though you couldn't immediately pay it, they would do a bunch of things to make it easier to pay so you didn't get jailed.
Unfortunately, a lot of people just ignore th
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This is the argument to raise when complaints are brought that corporate taxes are taxing income twice, first in the corporation, then in the pockets of the investors.
The real point of corporations is "limited liability" - you can't take the investor's house, only corporate assets. Society simply has to bear the real costs of corporate malfeasance. We have to clean up their messes (literally in the case of pollution) and our citizens must simply bear the harm done by their failures and outright crimes, un
Let me do the math (Score:1)
26.1 - 3.7 = profit
Nothing like a little incorporation to protect your ill gotten gains. Unless you charged the owners with felonies, your justice department is a joke.
I don't get why scalping is a thing (Score:4, Informative)
I don't get why scalping is a thing. It's evidence that the ticket price is too low. Supply and demand. Event organizers should just raise their prices, then there will be no need for purchasing limits, etc. Better yet, in the digital world, why not eschew setting explicit prices at all... just have an online auction that continues right up until the start of the event. Want those seats on the 50 yard line? Just outbid the current high bidder. If bidding right up to the event is annoying, cut it off a day before or something, but make the tickets non-transferable.
If this results in insanely-high ticket prices (but the tickets are still all sold out), that's just evidence that more events and/or bigger venues are needed to meet the demand.
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People already complain about ticket prices. So...what would be the difference?
It's not really (Score:2)
So the band plays in venue with 1000 seats. The venue owner wants to guarantee a profit. He can set the ticket price really high, but there's a good chance he won't sell his tickets and he'll lose money.
Scalping lets him shift that risk to the ticket scalper. Scalpers often lose big. They make it up when the score big. Some do anyway, some don't and go ou
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So the band plays in venue with 1000 seats. The venue owner wants to guarantee a profit. He can set the ticket price really high, but there's a good chance he won't sell his tickets and he'll lose money.
Scalping lets him shift that risk to the ticket scalper. Scalpers often lose big. They make it up when the score big. Some do anyway, some don't and go out of business. There are a *lot* of little ticket scalpers you don't notice if you're not in the market for shows. There's an entire additional layer of them.
So, what you're saying is that this is a case of the free market doing its typically-excellent optimization.
The bands, for their part, hate scalpers, because they make their money selling merch at shows, and if they show up expecting 1000 fans and find 100 instead they're boned.
The auction scheme would fix that, and maximize ticket revenues, too.
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No need for a fancy auction. Just put the tickets on sale well in advance. Set a ridiculous price. Have the price drop linearly each day, with day-of tickets going for something like five dollars. Fans pay what they think it is worth to get the seats they want. No ticket needs to go unsold. Scalpers always lose.
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I really really like your thinking, but we've seen this kind of pricing mechanism with Uber but in reverse: the prices start low and increase until a driver decides to take the fare. So then the drivers collude and promise not to take any fares until the price rises above a certain level. This maximizes profit for the drivers.
With an auction where the prices start at a ridiculous level and fall day by day, the colluders just need to wait until the prices fall below a predetermined level, then buy their tick
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the difference between the two is that one is the consumer making the choice and the other is the seller(essentially) making the choice. Lets say the first time this happens. the second time, many would be like 'i didnt get a ticket last time, so i'm going to buy it a day earlier.' This would continue until it is evenly spread out.
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This is the correct answer. Basically a reverse auction, where the price starts high and goes down.
Except you don't drop the price linearly based on time, you drop it based on demand. Each event will have a different price and demand curve, and demand at a certain price point will vary based on the event. When demand slips, you lower the price until demand returns to some steady state. Predictable linear price declines would probably still be exploited by scalpers.
It definitely screws the scalpers over
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As to adding more performances to meet demand, that may work for some concerts, but most artists probably are doing as much touring as they're willing to do. For other events like major sporting events, there simply isn't an option to play the Superbowl twice.
As to how the price drops over time, I've learned that simple systems gain acceptance much more easily. With a linear drop, they can advertise exactly what the price will be on any day in the future, provided the tickets are still available. A linea
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You're right about events like the Superbowl, but those events are inherently limited to begin with and will always be expensive. Face values on Superbowl tickets started at $950 and went up to $5000. If you can afford to fly to the game, find a hotel, the ticket price is the least of your worries.
While I can see the limited desire to tour more by old bands like the Rolling Stones, for young artists you would think they would play more shows. They have no idea how long they will remain popular, might as
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Almost all the good seats go to rich people now. It's worse than the lottery to get excellent seats at a concert unless you buy them from a reseller.
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Some artists will prefer a large crowd of fans and less money that an empty room with tons of money...
Very true, and most of these artists are friends with the women who actually prefer smaller penises because “size doesn’t matter it’s how you use it”.
In fact, they all live in the same apartment complex in Non-Existentville.
I used to work at Ticketmaster (Score:5, Interesting)
Not long ago, too. You wouldn't believe the herculean effort that company (and others) went through to try to deal with bots and ticket scaplers. People complain about the high fees these companies charge for shows, and there's definitely some merit to that, but a whole hell of a lot, meaning multiple employees and organizations within the organization spent a huge, huge chunk of time on projects to mitigate this crap, only to see the bot developers find ways around the technologies. It has definitely gotten better though. No one goes to shows anymore.
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Didn't Ticketmaster also have a ticket resale service that charged a premium for selling scalped tickets?
Didn't refers to something in the past.
I think you mean "doesn't" because they're still offering that scalper service (Ticketmaster Verified [ticketmaster.com])
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easiest way around scalpers is to require a form of identification with the ticket. If the id is printed on the ticket and you need matching id to enter, scalpers would never be able to sell tickets.
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Even though those companies say they don't like scalpers, and are trying "everything they can" to avoid this happening, in the end they only care if the tickets were sold or not.
Shut down legal online scalping = problem solved! (Score:2, Interesting)
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You must be too young to remember when scalping was actually illegal.
It didn't stop *anyone* from scalping tickets, including in the streets before the event. It also massively inflated crime and fraud associated with black market ticket markets.
You would go to a big event and see the scalpers conducting deals in the streets, and inevitably at least one got arrested. It was only a misdemeanor, so nobody was really slowed by it. But sometimes the scalper was carrying a gun (no shit, they had thousands in
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Stubhub and similar are now almost out of business, as the scalping pressure from Ticketmaster is so overwhelming.
Tickmaster and LiveNation have nearly cornered the scalping market.
how do the laws on this work? (Score:1)
Scalping is arbitrage (Score:1)
You will never eliminate scalping unless China takes over the US, and probably not even then. It's what happens when prices are less than what the market will bear -- arbitrage.
GPU Scalping (Score:2)
Can we get this law applied to scalpers of GPU's? This crap is insane.
Meanwhile TicketMasturd& LiveNation go scot fr (Score:2)
The main things that has diminished the "scalper" market in recent years is Ticketmaster setting up to scalp themselves, and making it more efficient for the ticketholders to sell through their platform.
Nobody is investigating them..
I wonder how much they have to "donate" to politicos to buy that lack of oversight?
Matter of fact they likely paid for this investigation, so they can continue to blame "bots" for their own actions.
Was Ticketmaster one of them? (Score:1)