Ticketmaster has been hit with a class-action lawsuit for “unlawful and unfair business practices” by allegedly “encouraging” scalpers.
According to the suit, Ticketmaster emboldens touts and collects a fee on both the initial sale and resale. Rolling Stone magazine reported that the suit has been filed by law firm Hagens Berman on behalf of lead plaintiff Allen Lee.
The complaint states: “Have you ever wondered why Ticketmaster has been unable to rid itself of the scalpers who purchase mass quantities of concert or sports tickets from its website and then resell them for much more minutes later?”
“The answer: Ticketmaster hasn’t wanted to rid itself of scalpers because, as it turns out, they have been working with them.”
CBC News and the Toronto Star uncovered the touting scheme after they filmed Ticketmaster employees claiming that the company “turns a blind eye” to those who have multiple accounts on the company’s inventory management platform TradeDesk and were securing dozens and even hundreds of tickets at a time.
The company has already said it is conducting an internal investigation, but denied the claims of the employees were accurate.
Ticketmaster’s Professional Reseller Handbook includes a programme that “rewards professional reseller partners” for increased sales year over year, according to the complaint.
“Indeed, on its own website, Ticketmaster refers to the activity of professional scalpers as ‘unfair competition,'” states the complaint. “But now it has been caught secretly permitting, facilitating and actively encouraging the sale of tickets by scalpers on the secondary market using its TradeDesk platform — all for a second cut on those sales.”
When the TradeDesk scandal broke, Ticketmaster president Jared Smith has admitted “there’s clearly some things that we’re not doing well enough.” He said Ticketmaster does not give resellers it works with the chance to pull tickets before fans. He also defended the existence of TradeDesk, noting StubHub’s Ticket Utils and Vivid Seats’ SkyBox.
In addition, US senators Jerry Moran and Richard Blumenthal have called on Live Nation president and chief executive, Michael Rapino, to dedicate “immediate attention” to the escalating scandal surrounding Ticketmaster’s alleged connection to ticket scalping activities.