House of COMMONS







Tuesday 26 June 2007






Evidence heard in Public Questions 1 - 164




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Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 26 June 2007

Members present

Mr John Whittingdale, in the Chair

Philip Davies

Paul Farrelly

Alan Keen

Rosemary McKenna

Adam Price

Mr Adrian Sanders

Helen Southworth


Memoranda submitted by the Rugby Football Union, the Football Association and Wembley National Stadium Ltd, and The All England Lawn Tennis & Croquet Club


Examination of Witnesses


Witnesses: Mr Paul Vaughan, Operations Director, Rugby Football Union, Mr Alex Horne, Managing Director, Wembley National Stadium Ltd and Director of Finance, Football Association, and Mr Nicholas Bitel, Solicitor Representative of The All England Lawn Tennis & Croquet Club, gave evidence.


Chairman: Good morning, everybody. In the last few months the Committee has had representations from a number of sporting bodies and from the music and entertainment industries on the subject of ticket touting. The DCMS has also been holding a series of summits and there is clearly a lot of public interest around this topic. It is for this reason that the Committee has decided to hold a one-off hearing this morning in order to take evidence from all those with an interest. I would like to begin by welcoming representatives of the sporting bodies: Paul Vaughan of the RFU, Alex Horne representing the FA and Nicholas Bitel representing the Lawn Tennis & Croquet Club. Before we start Paul Farrelly I believe would like to make a public statement.

Paul Farrelly: I would like to declare my interests as I am the Secretary of the All Party Parliamentary Rugby Union Group and of the Commons and Lords Rugby Union Football. Chairman, we have received allocations of tickets from the RFU but we have never ever sold them on to anyone at below face value or above face value!

Q1 Mr Sanders: You represent the Five Sports being the England and Wales Cricket Board, the Football Association, Lawn Tennis Association, Rugby Football League and Rugby Football Union; and the Five Sports list four concerns associated with ticket touting: pricing genuine fans out of the market; diversion of resources from the sport; the undermining of consumer protection; and public order issues. Which do you consider to be the most serious of those?

Mr Vaughan: If I may start, it is probably worthwhile just touching on why we see touting as a problem generally, and how we allocate our tickets so the Committee can understand how things work. Generally the RFU, and many of the other sporting bodies as well, make most of their tickets available for their membership. This is primarily to encourage either players to play, or volunteers to continue within the sport after they have stopped playing, and it is a reward system in order to make it work. They are not priced in an economic fashion; they are not priced in a true free trade sense of, "We'll maximise the amount of cash coming in". Basically we want to price our ticketing so that they are affordable for our supporters, who tend to be the players and the volunteers within the game, and we want to give them first stab at it but we want to make them affordable. I think in the same way that London 2012 sees the assurance of tickets reaching real fans rather than those with the deepest pockets, and the sporting legacy to the Olympics, all sports probably see this being an ongoing situation on an annual basis for our own sports. I think the secondary market exists on the basis that there is a margin to be made by people who are able to obtain tickets. What we are trying to do is ensure that the person who comes to Twickenham, for sure, and Wembley and the All England Tennis Club is very much the genuine fan we want to see in the crowd, rather than the person with just the deepest pockets.

Q2 Mr Sanders: Can you define what a genuine fan is?

Mr Bitel: From our point of view the makeup of the crowd is probably the most important element. Some of you may recall some years ago a Man Utd player complaining about the prawn sandwich brigade watching Man Utd and sucking out the atmosphere of football matches. The atmosphere is very important to us. We try and tailor who gets the tickets.

Q3 Mr Sanders: What is a genuine fan? From what you have said, it sounds like somebody who makes a lot of noise in a stadia?

Mr Bitel: No, not at all. For instance, we allocate to tennis clubs up and down the country because these are people who are supporting tennis at the grassroots year in and year out, and that is a very important part of the element of our makeup. We are allocating tickets to schools because, again, the aim is to interest schoolchildren in tennis and allow them to come and experience what is one of the premier sporting events in the calendar. Those types of people are the ones we wish to protect.

Q4 Mr Sanders: That is not a definition of a genuine fan; that is just how you distribute tickets.

Mr Bitel: There is no reason why somebody who pays a lot of money is not a genuine fan - I accept that entirely; but the problem is that if you put tickets to the free market and they are only available to those with deep pockets it prices out the rest of the market.

Q5 Mr Sanders: Is not the genuine fan who is likely to pay more money for a ticket?

Mr Bitel: I do not think a genuine fan could afford, for instance, Wimbledon finals tickets. If you tried to buy them from the touts at the moment a pair of Wimbledon finals tickets will cost you 3,000, whereas we are selling them for 87. I do not think there are many ordinary people who can afford 3,000 for finals tickets and yet we are putting them in at 87. Those are the people we are trying to protect.

Mr Horne: If I answer the original question, Adrian, if that is okay: I am primarily representing Wembley Stadium today and, therefore, both football, rugby and concert events; and my major concern with touting, covering the four things represented in the Five Sports submission, would be around public order issues, as well as consumer protection. The issues of managing forged tickets, illegal tickets and duplicate tickets that most naturally find their way into the marketplace as a result of this secondary ticket touting route cause huge problems for us at turnstiles, and huge disappointment for fans who feel they have obtained a piece of paper, if you like, but represented on a website as being from a Wembley source and is not at all. We are dealing with huge issues in a very short space of time on a public order basis, and defending our own reputation against consumers who feel let down because they have come into possession of an illegal and unlawful product and they are trying to access our stadium.

Q6 Philip Davies: I think the prawn sandwich brigade was a reference to all the tickets you people sell to the corporate clients, rather than the tickets that touts sell on to a handful of people at events, so I am not sure the prawn sandwich brigade is a good argument for you if you really want genuine fans there. Perhaps you should not give so many tickets to your corporate clients. That hardly seems a way of getting genuine fans in. What I want to ask is: can you give us any examples of where the Government regulates the secondary market of anything; where the Government regulates the price and the sale of the secondary market in anything?

Mr Bitel: In tickets, yes.

Q7 Philip Davies: Can you give me one industry where the Government regulates the price or the secondary market of anything? No. I cannot either.

Mr Vaughan: There are probably a number of markets where the primary market is actually regulated rather than the secondary, because there is no secondary market for it.

Q8 Philip Davies: The Government does not regulate the secondary market, so when people sell art and think, "I can get 90 for this art", and somebody thinks, "Great I'll pay 95 for that and I can sell that on for 200", the Government does not regulate that because that is the way the world goes round.

Mr Bitel: The Government does regulate it.

Q9 Philip Davies: The whole world goes round on people buying things and selling them on.

Mr Bitel: It is a criminal offence to sell on your ticket for London Underground, for instance.

Q10 Philip Davies: Why are tickets any different from anything else that people buy and think, "Actually I could sell this at a profit"? Why should tickets be different from anything else?

Mr Bitel: Tickets are not a commodity. I think that is the basic flaw in that particular analysis. Just in the same way as the Government regulates the laws into who comes into private land, we are private land and we regulate who comes into our grounds or stadia; and in the same way we are issuing a licence in the same way as a landlord issues a lease. If you are a landlord you can refuse to sell the lease onto whoever you wish to. We are issuing a licence to enter into our land to particular people, named individuals; and very often they are named individuals for a particular reason. For instance, we have issued tickets to wheelchair users because we want to have a certain number of tickets available to wheelchair users, and we are seeing those tickets being touted to the general market, to non-wheelchair users. We think that is an inappropriate use of the free market.

Q11 Philip Davies: Who loses out on ticket touting; who are the losers?

Mr Vaughan: If I could just answer that. It is the opportunity cost to the sport potentially. We are trying to reward players, volunteers and schoolchildren, people we want to encourage to stay within the game. At the end of the day the sport loses because if we do not enable them to keep on getting their tickets they will not belong to clubs and the sport will shrink. I believe if you spoke to your own club within this august body here, they do not sell the tickets on because they genuinely want to use them. If you looked at the differential it is an opportunity cost to the sport. The secondary market exists because we price them lower. If we priced our tickets at an economic price - there are some prices going on at the moment from viagogo for the England v Wales game February 2008. Firstly, we have not even printed the tickets; we have not even designed the tickets; and they are going at a rate currently of somewhere in the region of 592 each. We are pricing them, they say within here, of between 20 and 65: that is wrong.

Q12 Philip Davies: Who is losing out because somebody is selling it on for 500? You have got bums on your seats; you have sold the ticket at the price you wanted to; the person who has paid 500 is happy to pay 500; the person who is selling it is happy to sell it; who is losing?

Mr Vaughan: Are you suggesting that the sport should actually charge 500 to start with?

Q13 Philip Davies: No, I am just asking: who is losing out?

Mr Horne: The example that Paul is highlighting here, it could be the end user who may be happy to pay 500 for a ticket, but that ticket does not exist yet; it is not in the hands of viagogo and they have no right to enter into that transaction. Whoever has used that portal to set up half of a transaction does not have the other half of a transaction to fulfil. From a consumer perspective the RFU are somehow being linked with a transaction they have no control over.

Mr Bitel: For example, yesterday we put tickets on sale via Ticketmaster; these are last minute tickets that became available; someone bought one of those tickets at the proper price and two minutes later put it on sale on eBay. So they never had any intention of coming along, but they just decided to buy it and resell it. The people who lost were the next people in the queue who wanted to buy that ticket and lost the opportunity of buying the ticket at the regular price. In another case, we have seen tickets which we have issued for schools, intended for schoolchildren, being touted via eBay in that particular case. Who have lost out: the schoolchildren who cannot come to the event. There are a number of people who lose out from ticket touting.

Q14 Philip Davies: With a limited number of tickets only so many people can go, so the person who won out was the person who paid the tout for the ticket. If they had not had them they would have lost out. A punter somewhere would have lost out one way or another, whether you had ticket touting or not, would they not? One of them would not have been able to go.

Mr Horne: To use the children analogy, it is unreasonable to allow an open market to have adult access into an area that has been specifically designed to be sold for children. A similar analogy you could use for football.

Q15 Mr Sanders: If you are under 16 you go through a different turnstile at a football ground. Why can you not issue a ticket that is under 16 only with some form of ID? Therefore, somebody who is over 16 turning up, or looks over 16, will not be allowed in. It will be obvious that they fraudulently purchased a ticket. Actually is not the answer in your own hands?

Mr Bitel: If you cannot stop someone from selling on a ticket then why should that be? If you see the evidence from the DTI who have complained that Glastonbury put photos on people's tickets to prevent them being sold on, it is not just a question of the answer in our hands. We have got the DTI saying to us on occasions, "It is unreasonable for you to put a ticket condition which prevents it being sold on". In those cases of the schoolchildren it would be unreasonable apparently, according to the DTI, for us to prevent them being sold on from schoolchildren.

Q16 Philip Davies: If I buy a ticket for a sports event and I cannot go, why should I not be able to sell that on to a friend, or give it on to a friend; or why should I not be able to pass it on to someone body else? Why should I have to hand it back to you?

Mr Bitel: If you cannot go you can get a refund from us; or, if you want to pass it onto a family member, usually under most circumstances we will say, yes.

Q17 Philip Davies: So you have not got a problem with people selling on tickets, or anything like that?

Mr Bitel: Selling on, yes.

Q18 Chairman: It is fair to say that you are extremely unusual in offering that refund policy. I know Wimbledon does but a lot of others do not. The RFU, and I believe a number of other sports, are now using viagogo for an arrangement as a secondary ticket market?

Mr Vaughan: Certainly not the RFU.

Q19 Chairman: Certainly two of your clubs?

Mr Vaughan: Two of our clubs which are independent businesses - and they drive their ticket sales in the best way can - do have an arrangement with Viagogo. I do not personally have a problem with these marketplaces, because that is what they are; they are allowing an opportunity for people to exchange tickets. It is whether or not you as the owner of the seat want to actually have your ticket traded in that way. We have had a discussion with viagogo, and a very positive discussion, because we are looking at ways in which we can enhance the exchange system. We have also done that with Ticketmaster, because we want the ability for people who cannot go to be able to get their ticket back to us so that we cannot actually send it on, as Nick said earlier, to the person who is next on the list who we recognise to be somebody who actually wants to come and support the sport long-term, not just because they have got extremely deep pockets and they just turn up in town that day and decide they want to go to somebody.

Q20 Paul Farrelly: The last one-day inquiry we did was into the quiz TV industry and we have seen what happened there afterwards. During that inquiry it was quite clear that many people exploit the internet to have sophisticated calling systems to maximise their chances, and some people make a good return on it. That is clearly a feature of applications to official primary ticket agencies. When it comes to the secondary agents, do you have any evidence that those major operations are more than just exchanges; that they have links, particularly in setting themselves up, with the organised touting fraternity?

Mr Vaughan: They are genuine marketplaces. eBay is a very good example and is a very good marketplace. In terms of its ticketing, it is able to control the types of tickets that go on there. For things like charitable concerts in Hyde Park, for instance, it is very easy to take them down; whereas in other things it seems to be extremely difficult for them to control. They will give you the numbers later probably, but about 60%-odd of people will only sell one or two tickets; but that also does not talk about the other 30-40% that sell multiple tickets. Whether it be rugby, concert, tennis or whatever, there are people on viagogo, certainly today, offering 18 tickets which do not exist yet. We are flabbergasted as to how that works. There must be a connection into some way of saying, "It's an easy route through"; newspapers used to be the route years ago; this is just the electronic version of it.

Q21 Paul Farrelly: The question was about the specialist, not eBay which sells tickets as well as unwanted Christmas presents. Do you have any evidence, being able to establish themselves, that these secondary sellers are more than just exchanges; that they actually are complicit and collaborate with organised touting operations with sophisticated application strategies?

Mr Bitel: First of all, some of the internet sales operations that you are seeing are purely touts in another form. We at Wimbledon have obtained injunctions against a number of ticket touts; it used to be street touts. We now know that they are running ticket sites on the internet. They are not the exchange mechanisms; they are not the viagogos of this world; but for the punter they cannot see the difference between a "Sold Out Events", if that is the name of the company, or "London Ticket Brokers" or "viagogo". They do not see the difference when they are the customer. Secondly, some of the exchange companies are offering a facility which says that if you do not get your tickets we guarantee that you get the ticket. How do you do that in a marketplace where there are no legitimate tickets for you to access?

Q22 Paul Farrelly: Clearly in the evidence that you have given, there are very clear remedies that could be adopted. Sellers could be forced to put on the ticket seat number and the block number to identify where it is coming from, and also make sure that is a real ticket. We could extend the protections that are there for football at the moment and the Olympics quite simply through a statutory instrument; that is quite clear. The Government in a free market is always going to be reluctant to legislate and regulate and has to be proportionate. One of the reasons is that there are always unintended consequences of legislation. The question I have got is really from the football evidence. What evidence have you got of the impact on prices of the legislation that is currently in place?

Mr Horne: The impact of prices in terms of the secondary market?

Q23 Paul Farrelly: Just the impact on pricing.

Mr Horne: In terms of the football fraternity we work very hard to maintain a reasonable level of ticket prices for tickets available (and I hate to use the word again because I know Adrian will pick up on it) to the genuine fans and genuine supporters. I know this is something keen to Alan's heart. At both the Football Association or the premier league clubs, we work incredibly hard to keep ticket prices at a very reasonable level. We know, as Nick has highlighted already, that Cup Final tickets, for example that were a maximum price of 95, more widely available at 60 and 80, were trading hands for thousands and thousands of pounds. That is the only evidence I have specifically in relation to this.

Mr Bitel: We acted for UEFA and when the law was extended to cover England matches abroad we did not see much effect upon the ticket prices in the secondary market. It used to be illegal only to sell tickets for England matches at home and now it is for abroad. Certainly for the European matches we have not seen much difference.

Q24 Paul Farrelly: The introduction of controls in football following Hillsborough you would not say has produced any unintended and adverse consequences that affected fans?

Mr Bitel: I certainly would not.

Mr Horne: I do not think so, no. It is beneficial benefits of what have followed the introduction of legislation in football. We all know it came about because of segregation issues in the Taylor Report, and the idea that you want traceable tickets into fans; you know who is sitting there; and you have segregation at football.

Q25 Alan Keen: I will come back to Alex and Wembley. Philip raised the point about the prawn sandwich brigade. It is true, is it not, Alex, that the FA were reluctant to have to sell as many debentures as they have but that was essential, was it not, because of the financing of Wembley Stadium itself? Is it not true that fans whose team maybe gets to Wembley for the first time ever will pay almost anything to be there? Those fans who never complain about managers' and players' salaries, because they think they deserve it, they do object to having to pay over the odds for tickets where that money goes out of the game. Is that not really the main complaint that fans have?

Mr Horne: I think that is right. It is worth just reflecting on the ownership structure of Wembley Stadium. It is owned 100% by the Football Association and the profits generated ultimately by Wembley will be reinvested back into football, which is the argument drawn up in the Five Sports paper. Yes, we have sold 17,000 seats on a ten-year licence basis to finance the world's largest and greatest stadium. To pick up on your other point, not only do fans probably object to being forced to pay substantial amounts of money for tickets, but fans would also object to having to buy tickets through routes, as I mentioned before, that are not safe for the consumer. They are not guaranteeing access to a stadium by having to resort to picking up tickets from internet sites; or indeed trying to get them on the street on the way into Wembley; and they cannot guarantee the atmosphere around them if they do not know whether they are going to be in with their own supporters. With a public order and protection hat on, as I mentioned in my opening statement, it is a very important aspect of the legislation for us because it enables us to track supporters of different teams into the appropriate ends of the stadium.

Q26 Adam Price: Shaun Woodward the Minister who is appearing before us later has said he thinks the majority of ticket buyers are relaxed about ticket resale. You have just said that the majority of fans object. Do you have any evidence of this? What is the view on this?

Mr Vaughan: If you want to buy a ticket you will never be upset by people selling you a ticket.

Q27 Adam Price: That seems a fair point! I know - I have been there myself.

Mr Vaughan: If you are trying to actually encourage kids to play the sport and keep the sport going for a longer time, it is the sport that loses out.

Mr Bitel: I think we all have had complaints from customers saying, "Why is it that your tickets are being sold at inflated prices", and it turns out when we investigate that it is not us who is selling them. We have all experienced that and our ticket office this particular week with Wimbledon is full of complaints of that nature.

Q28 Paul Farrelly: We have got the Rugby World Cup coming up as the next major tournament in September, what is so special about the Olympics where the Government has accepted anti-touting restrictions and put in place legislation that should not apply to events like the Rugby World Cup, some of whose games are being played in Wales and Scotland?

Mr Vaughan: All major events have something about them which needs to be ensured, that if you are bidding for something as a country - and what has actually happened is that London, having won the Olympic bid, the Government has signed up to protection of ticket touting, that that should be extended through to big events like the Rugby World Cup who do want protection if they are going to move into new markets, or indeed come back to old markets. The Rugby World Cup has only been going since 1987, so when it wants to come back here we are going to have to be able to say to them, "We'll protect your tickets", because that is their key source of income, and they are not cheap tickets I have to say.

Mr Bitel: I am Chairman of the Major Events Panel of UK Sport and we are seeing more and more major events saying to us, "If you wish to bid you have to protect the tickets". We are seeing that. The Rugby World Cup is one example. I know Scotland have a desire to bid against England maybe and others. Scotland maybe together with Wales, and maybe Ireland. Almost certainly the IRV is going to say, "You have to have this type of legislation in place". The Cricket World Cup is another example. The Caribbean Islands - nine different sovereign nations introduced laws to outlaw ticket touting for the Cricket World Cup as part of a prerequisite of obtaining that event. I think if Britain wishes to attract more major events in the future we are certainly going to have to see that type of protection being extended. I think extending it to 2012 gave a legitimate expectation to a number of these major international sporting organisations that Britain will do likewise for their events as well.

Chairman: We need to move on. Thank you very much.

Memoranda submitted by the Concert Promoters Association Limited

and the National Arenas Association


Examination of Witnesses

Witnesses: Mr Harvey Goldsmith CBE, Mr Rob Ballantine, Chairman, Concert Promoters Association, Mr Geoff Ellis, Chief Executive, DF Concerts and Mr Geoff Huckstep, Chief Executive, Nottingham Arena & National Ice Centre, gave evidence.

Chairman: For our next session can I welcome Harvey Goldsmith, Rob Ballantine, Chairman of Concert Promoters Association, Geoff Ellis the Chief Executive of DF Concerts and Geoff Huckstep, Chairman of the National Arenas Association.

Q29 Philip Davies: If I was a promoter and determined to stop ticket touts from selling tickets to my events there are a number of things I would do. I would make sure that everybody was entitled to a refund, which does not always happen with every event; I would make sure that my tickets were available to be purchased in an evening and at unsocial hours, rather than at a time when people are at work to give people a proper chance of getting a ticket, rather than not; and I would make sure that I sold my tickets in blocks so I kept some tickets still for sale right up to the final week of the event. If you are so bothered about ticket touting, why is it that many of you do not do any of those things, because it strikes me that you really cannot take it that seriously in that case?

Mr Ballantine: Taking it seriously, it is our living; it is how we make money. We are risk-takers; we guarantee income to artists; we guarantee income to venues; and we have to put money on the table to market and advertise the events. We want to sell as many tickets as we can, as broadly as we can; so tickets are on sale 24 hours around the clock. We would love to offer refunds. What we have guaranteed to do is, as soon as you give us some help against touting, we will issue a resale policy, whereby if you cannot attend the gig you take it back to the point of purchase and we will put it back on sale once the primary tickets are sold out so that the customers can come along to a one-stop-shop to buy the next tickets. Unfortunately what we will refuse to do at the moment is be a clearing house for touts because, using your analogy, if I was a tout and refunds were offered I would simply buy as many tickets as I could to as many concerts, try and flog them for as great a profit as I could, and any unsold I would go back to the box office the day before and say, "Sorry, can't attend for these 120 tickets I've got, give me my money back".

Q30 Philip Davies: The other thing you can do is restrict the number of tickets you sell to one person.

Mr Ballantine: We do that. For example, the Take That tour that caused so much press is very much about groups of females going out from offices, schools or wherever in their groups for a night out and you need to be able to offer them six seats together; and even then we had complaints that it was not enough. As the BBC TV showed when they were filming the queues, there were just queues and queues of young teenage boys who were clearly taking the day off school, bunking off work and buying up as many tickets as they could to go straight onto the secondary market. It is very, very difficult to penalise the public and to prevent the public going to concerts in the way they want to go to concerts for the protection of those few percentage who go with the intention of touting tickets.

Mr Ellis: On blocks of sale it is quite common for outdoor shows to go on sale with the initial allocation of tickets and then, once the final capacity is agreed, more tickets are released closer to the event. With festivals quite often we have put tickets on sale straight after this year's event for next year, a limited number, and then we go back into the marketplace again in February or March. I think we cover all three of those bases. We have set up with Ticketmaster for Tea in the Park Tickets a ticket exchange programme, where again on a sold out event if somebody genuinely cannot go, or decides they do not want to go, Ticketmaster will give them a full refund on their ticket price and then resell the ticket to somebody else who wants to go.

Mr Huckstep: In terms of access, the box offices at the venues are open seven days a week until 9pm so most people can access them during the day and after work.

Q31 Philip Davies: This is marvellous because if I am an ordinary punter, and you are doing all these things, it means I have got just as good an opportunity to buy a ticket for an event I want to go to as a ticket tout. You have made it clear that I have got every opportunity to buy a ticket; so actually if I do not buy a ticket because I am a genuine fan but I might be at work and I do not really know that I can go so I hold off buying a ticket, when I decide I can go to this performance, under your regime I would be scuppered because all the tickets would have been sold. In fact touting gives me the only opportunity I have got to go to that event, because I can look up and find that somebody is actually selling me a ticket; and I can make a decision whether or not I want to go to that event. I can make that choice. If I do not want to pay the price they are asking that is my choice. Actually touting gives me the only opportunity I have got to go to your event, because otherwise it all would have been cleaned out by genuine fans?

Mr Ballantine: The great opportunity you and the rest of this Committee have is to stop this, because only you people can stop these touts getting hold of the tickets in the first place. We have already seen the statistics that 60% of people selling on eBay sell one or two tickets and that is it. What is a ticket tout? A ticket tout is an opportunist. A ticket tout is someone who does manage to get those tickets; and it is so easy to sell these days because you are marketing to every single computer in the country by one listing, it is easy for anyone to become a ticket tout. You say you have missed out on the opportunity - your option here today is to say, "Okay, now we understand what this is about let's put a stop to it; let's not allow these people to tout the ticket; and let's have a fair distribution to everybody". Because there are only so many tickets for the pop groups that go on sale; and there are only so many people who want to see that group. The fact is, we get those tickets to the fans that want to go; however, with the current model possible 40% of them go through the hands of someone who is marking the ticket price up; but they will eventually reach the fans who want to go to that concert, and what we are asking you to do is just eradicate that middle layer. Everything you have just outlined is there waiting for these fans to buy their tickets whenever they want by whatever method they want.

Mr Goldsmith: We are a business. We are here 365 days; we are not just for the odd concert that you read about in the newspapers causing a furore or just had huge demand. We are actually a business and we are here all the time, and we are presenting events and concerts all through the year to many fans who are real fans of music; they buy the records; they follow the artists and they come back more than once. They want to be able to see their heroes and those artists they support. They do not want to pay inflated prices for them; and we spend a huge amount of time when we define what our ticket prices are on how that is made up. It is not just plucked in the air. Ticket prices are a combination of what the costs are; what the breakeven point is; what a fair margin is; what we think that act can stand in the marketplace in a fair way. We are not out to rip-off or take advantage of our customers. I know it sounds a bit strange, because in the way you are asking the question you are saying, "Okay, everybody should be able to resell tickets. They should do want they want". That is not our business. We are a business; we are not here to supply parasites who are there to monopolise and capitalise on what we are trying to do as an industry. That industry is pretty far and wide. Not only do you see the front face of it as a concert or what you read about, but remember what goes into getting those artists to that - the employment values; the production values; and all the rest that goes in it, that is what supports our industry. We are not here to create a marketplace for someone else who puts nothing back and just takes out.

Q32 Philip Davies: Finally, what evidence have you got to eliminate ticket touting? What evidence have you got that any government legislation or any ban would eliminate ticket touting? If we stopped people on eBay selling tickets are you really nave enough to think that would be the end of ticket touting, and it would not just be driven underground? Who is going to police this? Are you really asking that my local police force that are stretched for resources, and people who ring up with burglaries and cannot get somebody to come, you are saying that my punters should expect the police to scrap all their burglaries and their shoplifting and come and rescue you from the situation you have got yourselves into?

Mr Goldsmith: The police are there anyway. I went to Wembley Stadium two Saturdays ago and from coming out of the station - because it was the first time I had been there and wanted to experience it as if I were regular customer - I counted 23 policemen with their flak jackets ready for World War Three, machine guns and God knows what else - Wembley Station. Walking down the steps, more policemen. I counted about 12 or 14 Wembley stewards also patrolling up and down. Then I was confronted, at my count, with 43 ticket touts who were harassing people coming through trying buy, trying to sell; trying to do some deal; pushing people, "Can you buy this one". The 23 policemen were there whether the touts were there or not. All they had to do was look one stage further and protect the public who genuinely wanted to go to Wembley Stadium to see a show, who were not there for a riot and do not want to be harassed by these people.

Mr Ballantine: Actually we were paying for that police service to be there. No, we are not asking for the police to police anti-tout. We have said all along we will do this ourselves within the industry. If you say to the industry, "Okay touting is now illegal" - as the IOC demanded that you have done for the Olympics, which is a fantastic step and should be taken forward with every major event in this country - if you say that, well, straightaway we are able to police all these bedroom touts on eBay and the majority of them will stop because they are not lawbreakers, they are opportunists. If it is against the law they will stop straightaway. Look at how many tickets will be touted for the Olympics - hardly any. No, it is not going to go away completely, we are realists. We know there is going to be some underground stuff, but at least if you are buying a ticket from a tout on the street you can see he has got it; not these fraudsters who advertise tickets, none of which exist but they are asking for your money.

Q33 Mr Sanders: That is a criminal offence already. If you put on an act in the Wembley Arena that could have filled the Wembley Stadium you are going to get touts; but if you put an act on in Wembley Stadium that could only fill the Wembley Arena you are not going to get touts, so it is actually about supply and demand.

Mr Ballantine: Yes, it is but we are not a supply and demand industry. What we are trying to do is fill every venue and leave a small demand left over and hope that we can entice those people either to the next concert we are promoting, or the next tour that that band are doing. You would not enjoy a concert if you went along to Wembley Stadium and there were 10,000 people there because there is no atmosphere. You have to generate full houses and get the atmosphere going. It is a very, very careful balance that we do; and we keep those ticket prices low and affordable to ensure that those venues are full and full of fans who want to spend their money on concerts; want to go to ten concerts a year and not two concerts because it is costing them 250 a ticket.

Mr Huckstep: You are assuming that all the secondary agents are genuine sellers - they are not. Up and down the country the National Winners' Association covers venues from Aberdeen and Glasgow, down to London, Brighton, Birmingham, Sheffield and Nottingham. At every show we have issues with people who turn up who have bought tickets through the secondary market, whether it is eBay, tickettout.com, World Ticket Exchange. We have the problems on the night when these people have turned up, often having travelled hundreds of miles and their ticket is not valid; or the guy has not turned up; or it is in the wrong seats. I can tell you now, going to an event is an emotional thing for young people. If they cannot get into that show and you know they have got a ticket and you have to deal with that on the night, as we have to, I can tell you now that is not a very pleasant experience. It also deflects my staff away at Nottingham from dealing with genuine people that need customer services. You are actually assuming that the secondary market is a genuine market and it is not. It is full of fraudulent people.

Q34 Helen Southworth: In those terms then what would you recommend in terms of the code of conduct for resales?

Mr Ballantine: For a resale what we are planning to do, what we cannot do is offer complete refunds. For example, Glastonbury last weekend, a 20 million outlay to build a site, pay the artists, get everything ready, torrential rain the week before; ten thousand people probably find they had a relative die or something meant they could not attend and they would ask for a refund; that would make the Glastonbury organisation go bust. That is 2.5m they need to refund and people do not make those sorts of profits. That festival would end overnight. We therefore cannot issue complete refunds for people who simply change their minds because we build the event depending on the ticket sales. Once a promoter guarantees the artist the money and the venue, then the artist goes and designs that tour, the expenses are taken on and that money is on the table. If then the customers come up and ask for a refund two days before and you have not got a chance to resell them that is where promoters would be going bankrupt left, right and centre. What we will offer though is a resale policy if you cannot attend the event for whatever reason, as soon as there is any sort of legislation to help out because otherwise we are simply going to be acting as a clearing house for touts.

Q35 Helen Southworth: Just give us the detail of what this policy would contain at some point in the future then?

Mr Ballantine: You go back to the point of purchase where you bought your ticket from and say, "I can't attend the gig. There's my ticket back". You get the full face value back. The ticket is offered for resale; so as and when tickets are sold out these tickets go on sale. Customers who have not got tickets they only have to check with the primary tickets - usually the venue box office - they do not have to go through viagogo and Seatwave and eBay, and all these people making an extra layer of margin out of it. You go back to the point of sale always and you can ask exactly where the seat is.

Q36 Helen Southworth: But you would only do that when all your other tickets had been sold?

Mr Ballantine: Of course, that is the only model we can support, otherwise your touts are just going along and they will get a load of tickets and when they do not sell them they will take them all back to you. We cannot finance that. It is bad enough having to cope with touts in the market now, let alone us being the clearing house for them and supporting them.

Q37 Helen Southworth: Is that an industry agreement?

Mr Ballantine: Yes, absolutely everybody. You have seen the letter we put in, I hope. I have never seen so many signatories come from so many competing parties, all united. The strength of feeling of this is incredible out there. It is absolutely unbelievable. The industry feels that this is a real turning point for us, and we are desperately trying to hold on to our members. We do not operate like the RFU, who commendably look after the schools, or Wimbledon. We are a bunch of individual entrepreneurs and we are trying to hold everybody until we get through this process before people say, "I'm sorry, but I've had enough of everybody else making it on the secondary market. We are now going to auction percentages of our tickets". Those people will just explode onto the market and replace the touts that are selling on the secondary market, and the public is going to lose out hugely. That is what we are coming here to day, "Please protect the public from what is an inevitable economic explosion".

Mr Goldsmith: In essence, I guess I am stating the obvious, but we are the people who are investing in our industry. We are nurturing the talent right the way through to hopeful success where there is that kind of demand. Equally, we have to have a balance. All alongside our industry, as I said before all the people employed alongside it, we also nurture and develop. We do consider ourselves to be a professional body and we are genuinely trying to deal with this. Not only is it affecting the genuine music and sports fans but, as you well know, in the West End with theatre tickets, people are coming in from all over the world and part of their experience is to go to the West End and go to events, even to go to the very popular art exhibitions, and what they are faced with is this whole secondary touting market. It is doing all of us a disservice.

Q38 Helen Southworth: At the moment people could say that your market is what is creating the markets for touts?

Mr Ballantine: Yes, because we have priced realistically.

Q39 Helen Southworth: Your market is currently creating that market. Why should not fans who cannot use tickets currently be offered a resale just because touts might be interested?

Mr Ballantine: They are. Traditionally over the years we have always given refunds to fans. We cannot openly say it but when people come back for genuine reasons, yes; especially sold out shows because we know we can get rid of the tickets straight away. There are ticket exchange mechanisms out there; there are ticket refund mechanisms out there; what we are saying is, "Let's end all this confusion. We are going to go with one resale policy that every single member will sign up to". It is going to be out there and published that every ticket will be sold with a stamp from the Society of Ticket Agents and Retailers; so we are hoping the star will become as well known as ABTA amongst consumers, and consumers will know to only go to that place. Where you say that we are creating that market, I do not know how many of you have heard of The Fratellies, how many of you have heard of Muse, how many of heard of TheView; however, you have all heard of the Arctic Monkeys. There is a band that has got this huge media hype going on around it, does that give us the right, therefore, to charge 60 for the Arctic Moneys' tickets because everybody knows about them and there is this huge media hype. We are doing them outdoors in a couple of weeks' time, 28.50 for a ticket. That is not market value but the band have only just released their second album; they know they have got to reward those fans who have been following them around the clubs paying 7.50 and 12.50 building them up to the place where they are, where they are the biggest selling album of last year in the country. Those fans need to come along and feel that they have had genuine value for money. They are getting five or six bands for 28.50 and probably one of the greatest concerts this summer. We know we could have charged three figures for that, but those fans will not necessarily come back. They will say, "Well, it was alright but it wasn't worth a hundred quid", and the damage is done.

Mr Ellis: Sustainability is very important for our business because we are developing new talent as well as the Arctic Monkeys. We are bringing along the next Arctic Monkeys. We need music fans to have enough money to go and see the club show that might only be 5, 6 or 7 and is not sold out. We need money out there in the marketplace to support that, as do the sporting bodies. The economic impact is also greater; if somebody can attend six concerts at 30 rather than one concert at 180 a go, they are going out more often and therefore they are spending more money, and therefore there is the drip-feed factor throughout the tourism industry as well.

Mr Huckstep: Can I just endorse what Geoff has said there. It costs a fantastic amount of money to build these things, we have seen it with the Wembley Stadium. The Nottingham Arena was 43 million of local investment, city council investment and Sport England investment. That has got to be sustained. We rely on the concert promoters to bring us regular business. If the fans were priced out of the market then the future for Nottingham Arena and other arenas is very much in doubt.

Q40 Helen Southworth: Can I just clarify that at the moment the majority of sales on eBay are private sales. Are you requesting that those be outlawed totally, or is it touts?

Mr Goldsmith: We want to outlaw the whole secondary market. A ticket is currency. I am not aware there is a secondary market in pound notes that you as MPs endorse. We consider our ticket to be currency, and it is important. We want eBay to take the "ticket" off their inventory because they do not need it. We want to have some help in order for us to help give the genuine word to public that support us, and we in turn support them by giving them the talent and the artists they want to see by having a concise, understandable marketplace that is genuine.

Q41 Adam Price: You mentioned some promoters being tempted down the route of auctioning as a response to what has happened. Has that already begun to happen?

Mr Ballantine: Yes, it is absolutely rife in America. The American live music industry is very interesting, where scalping took on a whole new head of steam there with the introduction of Seatwave, viagogo, eBay et cetera et cetera. Booking fees went through the roof, so you would pay 25% booking fees on average there instead of the 10-15% you pay over here. The amount of money over and above the face value of a ticket you pay there is absolutely enormous. Agents and managers in America are seeing that the secondary market is taking money out of the industry and, therefore, they are thinking, "We could do this ourselves. We'll auction best seats. We'll auction front row tickets. We'll wrap round a package where you get VIP hospitality beforehand", and their price is going up and up and the live market attendances are going down and down and down because people simply do not have the money to sustain that. If you are the manager of a band and you think that band has a 15-year shelf life and if you think "I'll just make as much as I can for that and then I'm out", then you are going to grab as much as you can. I think I speak for all of us when I say we are here long-term and we are looking for a long-term to protect what is one of the world's greatest industries based here in the UK.

Q42 Adam Price: As a quid pro quo if the secondary market was prohibited and was taken out of the equation, would you accept then a ban on promoters auctioning?

Mr Ballantine: It is very difficult because we are not a regulatory body. I know we would sign up to that, but what we cannot do necessarily is control a young entrepreneur, or even an older entrepreneur, who comes through and is under pressure particularly from the band who want to make that extra money; because the band with the promoter sets the ticket price. They might penalise all their fans and say, "Okay, we'll go for the 150 ticket and let's just play the arenas and capitalise on those with the deepest pockets". That is not a sustainable model but for their own particular one artist maybe they will make the most money by doing it that way.

Mr Ellis: We would be happy to comply if that part of the legislation was extended.

Mr Ballantine: We have never run any auctions or anything. What I am saying here though is we are not a regulatory body like, say, the FA.

Q43 Adam Price: How do you respond to be NME poll, which showed that 84% of their readers said that tickets were just like any other property that you should be able to sell?

Mr Ballantine: That selects parts of the NME poll that has come out. "Which of the following, if any, do you think should be made illegal: ticket touting, online auction?" 59% agreed to that. "Do you think selling tickets by auction is acceptable?" No, 67%. I am not doing the NME down but it was a quick straw poll and the secondary market have hung on to this like it is the greatest poll that was ever written. It is not reflective of what the fans say.

Q44 Chairman: I have a cutting from the NME which says "70% of NME readers voted for a complete ban on ticket touting." It depends which question you ask, as with most polls.

Mr Ellis: Can I add that the Sun did a poll as well and 76% of Sun readers want legislation and only 7% do not agree with legislation. That was in the Sun a few weeks ago.

Chairman: We all have experience of misleading roles.

Q45 Rosemary McKenna: Briefly - and I do know who the Fratellis are - particularly to you, Geoff. T in the Park has been incredibly successful and has grown and grown over the years, but there is a real concern now about young people being ripped off, people buying tickets simply to sell them on eBay. There was a case of a young man who bought a ticket from a fraudulent site. What are you doing to try to address that?

Mr Ellis: We are working with Ticketmaster, who have a system called Access Manager which means all tickets are bar-coded, which means if we find tickets are being sold on the secondary market, we can cancel them, providing the ticket numbers are placed on the website. Unfortunately, a lot of people cover up the numbers. We have examples of people putting tape over the tickets when they put them up. We are able to cancel tickets with our Access Manager system. That helps us. We do limit them to two per person this year. I have had letters of complaint from families saying, "We can't go now" but if we make it four per person, we play into the hands of touts, so it is difficult. We do what we can. We feel we price the event fairly but we are up against it without legislation. Philip says it is a different issue to the one of fraudulent sales, but it actually is not, because the fraudsters hide behind the ticket touts. We have had lots of examples of scores of people outside T in the Park who have travelled long distances, their tickets never arrived, they were never delivered, so they could not get into the event, which gives us a welfare issue as well, because we have people who have travelled long distances, were planning to stay there for the weekend and we have to try and get them home. We are having to bus people back, put them in taxes and so on at our expense. You could say that was not ticket touting, it was fraud but that fraud takes place on eBay as well. I had an e-mail from somebody yesterday who spent 1,200 on six tickets from eBay and their tickets have never shown up. The fraudulent activity is going on because of a lack of legislation.

Q46 Rosemary McKenna: If there were legislation, it would stop that as well?

Mr Ellis: It would.

Q47 Rosemary McKenna: I just wonder how we would do it. For example, currently on eBay you have this great thing, the high-street stores, the Kate Moss dress, people go in and buy half a dozen and within minutes they are on eBay, and that kind of thing. How would a law change that?

Mr Ellis: I am sure eBay will answer this themselves but if ticket touting were illegal, eBay would not allow tickets to be sold. That in itself stops it.

Mr Ballantine: This is the Department of Culture, Media and Sport. Whilst we are talking about Fratellis and T in the Park and Arctic Monkeys, we at SJM Concerts have been appointed to do the entertainment for the European Capital of Culture in Liverpool in 2008. That is something that DCMS bodies must be hugely proud of, that that is coming to the UK, and very excited about what is going to happen there. We are aiming exceedingly high, as is everybody in Liverpool, and what is being lined up will be absolutely spectacular and a complete one-off, with some true Liverpool legends doing some very interesting stuff. Our biggest problem is what to charge for tickets. People will pay 500 for this. We can only look after 25,000 people. To maximise the income and pay for all these events, we could do 25,000 tickets at 500 but I am sure you and all your colleagues would be up in arms as soon as you read about that in the papers. So what do we do? Do we say we will make it affordable, call it, say, 50? We know that pretty much everybody can afford 50 given six or seven months to work towards that ticket. Great. We also know that as soon as we sell those 25,000 tickets at 50, 10,000 of them will be straight on to eBay the following day. You might say, "We will protect that under the Crown Jewels example" but we would come back and say "Hang on, but how is that different from T in the Park? These are the same members of the public." It is very difficult for us to sit here and say you all understand culture, special events, one-offs. Somewhere we touch a nerve on every single one of you about the live experience and what it means to see people celebrating the greatness of this country. Whether it be Liverpool 2008, T in the Park or the Arctic Monkeys, somewhere along the line someone is going to say, "Actually, it is not about just grabbing that ticket and selling it, making all that profit, declaring none of it and marching off into the sunset."

Mr Goldsmith: It is the same for the Olympics because for 2012 in London for the first time ever the areas of culture and the cultural side of the Olympics are pretty important to all Olympic Games today and the Director of Ceremonies, the opening, closing and all the other ceremonies are now under one group. So here you have this group where you are quite happy, you will pass the legislation, which you have done, to prevent ticket touting or secondary market of tickets to see the games and the opening and closing ceremonies, yet the very same people are encouraging and putting on a whole raft of cultural events where the public can be absolutely ripped off, taken to the cleaners, no guarantee, no safety of their tickets, in the same thing. How does that work? Where is the equality in that? It does not make any sense.

Q48 Paul Farrelly: The Department of Culture, Media and Sport has had a number of ticket touting summits. I think the Association of Secondary Ticket Agents has been chucked out of at least one of them because of a failure to see eye to eye over fundamental practices. One of the things that has come out of that is this middle way of the Crown Jewels, the Crown Jewels of sport. If we had a Crown Jewels of music, we would have a lot of fun because the Stones would be up there, Springsteen certainly would. Would Rod Stuart be a Crown Jewel?

Mr Goldsmith: You cannot have a Crown Jewels of music.

Q49 Paul Farrelly: Do you think the white smoke emanating from the Department in terms of the Crown Jewel is too sport-biased?

Mr Ellis: It is. You can make T in the Park and Glastonbury and annual events Crown Jewels fairly easily. That would be easy to do and would protect those events. But the next (inaudible due to loud noise) The arrangements could be maybe a month before it goes on sale and there is not enough time to allocate it as a Crown Jewel event. The public maybe feel that the Killers should be a Crown Jewels event but it is not. You might think Rod Stewart should be but there is not the demand to see it. It would be impractical to do and it would just be rearranging the deckchairs on the Titanic.

Q50 Paul Farrelly: We have a very fair returns policy in the ticket exchange here in the Commons. Tomorrow is Tony Blair's last performance and the tickets would sell like hot cakes but, of course, we are not allowed to sell them. I do not have an allocation. I have to queue up for returns. I suspect some of my free-market colleagues on the Committee, if I had some and decided to auction them, they would have the Speaker lynch me. Do you think what is right and proper for the Commons should be extended outside to the ordinary music-buying public?

Mr Goldsmith: We have returns, we absolutely have returns, and quite often, when we have artists that are in huge demand, we will hold some tickets back for the night or for the week of in order to try and destroy this ongoing market. If a show is sold out very quickly, as is Wimbledon and so on and so forth, of course there is a returns policy but what Rob was trying to explain to you and what we feel very strongly about is that what we do not want is to be a carrier bag for every ticket tout and every secondary market player without the help of some directorate of legislation that we can genuinely tell the public at large where to go so that they know that their ticket is safe. Please remember, when you buy from the secondary market, one, none of them will give you a guarantee and two, in many instances a number of them are not even there if something goes wrong. If a concert is cancelled, either due to inclement weather, which is rare because we live with it, if an artist is ill, if you go back to what we consider to be the official agencies, particularly through STAR and ourselves, you will get a refund. If you go back to the secondary market, there is absolutely no chance of getting a refund, if you can find them. That just does not happen.

Chairman: We are going to have to stop it there. Thank you very much.

Witnesses: Mr Nick Blackburn, Managing Director, Seetickets, Mr Jonathan Brown, Secretary, Society of Ticket Agents and Retailers, Mr Tom Wright, Chairman, Society of Ticket Agents and Retailers, Mr Chris Edmonds, Managing Director, Ticketmaster UK, and Mr Paul Williamson, European Sales Director, Ticketmaster UK, gave evidence.


Chairman: We now move on to the primary ticket agencies and can I welcome Paul Williamson and Chris Edmonds, representing Ticketmaster UK, and Tom Wright, who is here for the Society of Ticket Agents and Retailers with Jonathan Brown, and Nick Blackburn, Managing Director of Seetickets.

Q51 Rosemary McKenna: Good morning, gentlemen. Can you persuade us that your service is the best one?

Mr Wright: Absolutely, is the answer. We have 32 million visitors to this country. We have a huge 85 billion visitor economy and the events industry is a huge part of that. We need to give confidence to people all over the world and domestically that they can buy tickets with confidence. They can come to STAR members and have absolute confidence about the tickets they are buying, that we refund if there are any issues of cancellation, they know where they are going to sit, all those fine details which are critically important. We are about tickets for confidence and the consumer deserves that from the ticket industry. That is what STAR and its members deliver.

Mr Williamson: The key thing which we bring is that we are selling authorised tickets on behalf of the event owner or the artist. We are selling them directly to the public, we are selling them with reasonable booking fees based on our costs of doing business, not based upon the perception of how hot that show is or how hot that act is. We are selling 365, we are selling 24/7 and we are investing millions and millions of pounds to enable us to sell online, have phone rooms through the night, so that we can offer customer service to all the customers out there for a wide range of events.

Mr Blackburn: The other thing as well is we protect the customer's money. We have had events which have been cancelled and we have refunded the money straight away, which, as Harvey Goldsmith said in the previous meeting, would not happen with a lot of the secondary market operators. I have something here which I have pulled off the internet and it could apply to any of the secondary market; it could apply to eBay or it could apply to viagogo but it is a Seatwave event and it is a Joseph ticket, which is one of the theatres we own. It is a 15 ticket where they claim the face value is 18.90. The 15 tickets are in the back rows of the upper circle. They are the worst seats in the house. That is not described. There is no map of where the tickets are. Joseph has attracted a new audience because of the TV show of people who are not used to going to the theatre, and they are selling these tickets for 352.88. I think it is a tout who has put them up on Seatwave, which is just a marketplace like eBay. This is an old trick of touts, to buy the cheap tickets and make out they are better tickets than they are. There is no map so the customer has no chance of seeing where he is sitting, whereas if you come to us or to Ticketmaster, you can see exactly what you are buying. This is what is going on all the time. There are millions of examples of this. The customer is being deceived. A new customer to the theatre would not know where the upper circle is. These are the last two rows in the theatre. 352.88 for four tickets, service charge from Seatwave of 52.88, processing fee for the tickets 75 each. It is not right.

Q52 Mr Sanders: Do not these tickets have "not for resale" on them?

Mr Blackburn: Yes.

Q53 Mr Sanders: Why do you not take them off?

Mr Blackburn: Because they do not put up the seat numbers. We cannot trace them back. We have asked eBay to do this. We have asked them all to do this so we can see where the seat numbers are. When we have been able to do it, we have done it. We did it for Kylie Minogue. We managed to trace quite a lot of the seat numbers but, if they are hidden, as they are here, and there are no details of the seat numbers, there are about 30 seats of this type, and these are only four out of that 30 so we cannot identify which seats they are.

Q54 Rosemary McKenna: Tickets coming from you then people will know are genuine. But what is to stop a tout going out and selling those?

Mr Blackburn: That is what we are asking to be stopped. We do put on "These tickets are not for resale". The problem is, whatever we do, both us and Ticketmaster have loads of checks to try and stop touts. We look at multiple bookings, same street addresses, multiple use of credit cards, all the things you can do with a ticketing system to find out whether touts are attacking it to buy tickets. This question of refunds is a red herring, because the bulk of the tickets that are put on eBay are put on six months in advance of the event happening. Nobody knows six months before whether they can attend an event or not. We sell tickets for the Killers; within two minutes the tickets are up on eBay. These are not people who cannot go to the event. These are people taking tickets away from genuine fans paying the face value. We estimate that 25-30% of tickets are taken out in this way, and it is wrong. As the previous panel said, ticket prices are set at a fair rate for the audience of that act. 30% go out, 30% of the fans who want to see it cannot buy those tickets at the right price because people are using the opportunities given to them by eBay and viagogo to make a quick profit.

Mr Williamson: We are seeing this all the time. We put on sale last week the Heineken European cup final of rugby for 2008 at the Millennium Stadium. Within 24 hours those tickets were appearing on eBay. There are thousands of tickets still available from the stadium. We are representing the stadium but people are trying to make a fast buck now with no intention of ever going to the event. Likewise with Prince at the new O2. Prince has put on 21 nights of shows with all the tickets at 31 deliberately to try and maximise the audience, the Prince fans out there, and those seats are appearing online for 120 a ticket, 140 a ticket.

Q55 Chairman: Are all 21 nights sold out?

Mr Williamson: Not yet, no.

Q56 Chairman: Who is going to pay 120 for a ticket online if they can go to the O2 and get one for 31?

Mr Williamson: We hope they will do so.

Mr Blackburn: I was at a Rod Stewart concert at Earls Court. I was watching the fans come in and people were complaining about buying tickets at excessive prices, when the show was not even sold out. One customer said, "I paid 400 for my two tickets." I said, "Why did you do that? You could have bought the tickets at face value through us." He said, "Because I saw an ad in the Daily Mail. I thought the Daily Mail was a respectable paper. This is what I thought the fair price was." That is why they bought the tickets. Not all of the public are as bright as maybe they should be in buying tickets.

Q57 Rosemary McKenna: I am convinced by the argument that we need to do something to protect young people, particularly those who want to go to concerts, but what you really need to do is persuade us what the best way is to actually do that. What legislation would you want the Government to bring in?

Mr Williamson: I think we are in agreement with previous speakers. We would like to see the legislation which is there for football and for the Olympics being extended. I think it has worked very well in football. I think it has removed a lot of ticket touting and a lot of the issues around football because it is seen as illegal to resell those tickets and it has certainly been made much more difficult. We would like to see that extended into other events, into other sports and music events, because we think that is fair and safer in the end for the customer.

Mr Wright: We would also like to see greater self-regulation. STAR is the self-regulation body for much of the industry. We have nearly 100 members. You heard from Rob Ballantine the commitment of his members as well to tie up with STAR. We have spent the last few years developing standard terms and conditions that would give reassurance to all potential purchasers here and overseas that they are going to get a good deal, all those services that have been touched on this morning. We want to extend that self-regulation. We have been in discussion with the OFT to get those terms and conditions approved. We think it is a key step that if the industry all move to the same terms and conditions, we can then have a kitemark to say to people "Beware. This is the primary market where you know that they have the tickets, you know where you are going to be sitting, you know if the event is cancelled not only do you get a refund but you get a refund of the booking fee if they are a STAR member as well, but if you go out of that accredited environment, then buyer beware." That is something we can do quite quickly by having the terms and conditions recognised and accepted and supported by the Government and industry.

Q58 Chairman: How is the OFT reacting?

Mr Brown: On the whole, we have come to an agreement. The terms are drafted but at the heart of the issue is the ability to enforce the transferability clause, which is going back to the question you had about whether we can prevent the resale of tickets in the terms and conditions. It is certainly true in terms of business to business or business to customer transactions, but not between customers. I think it is worth just getting rid of a misunderstanding there, if there is one. I do not think, certainly in terms of entertainment tickets, there is any concern about customers being able to pass tickets on to their friends, to sell them and mitigate their losses, as it were, by selling the tickets for the price they paid for them. The issue comes when they start selling them commercially, selling them for a profit, whether that is friend to friend or through mechanisms such as online auctions.

Mr Blackburn: I think the difficulty as well is the Crown Jewels issue. There are events like Glastonbury Festival, which we handled this year with pictures on the tickets. We have had a lot of the public saying to us "What a great way of doing tickets." Fortunately, we had a lot of time to set that up and do it. A lot of events come round more quickly. I did an interview with Sky where they asked me why could Liverpool not have done that for the European cup final but you do not have the time to do it. I think the public really appreciated that. Two years ago when we did Glastonbury they asked me "Why did these tickets appear on eBay?" and so on. Nothing this year. It was appreciated by the public. Events change. Rod Stewart might have been hot - we keep bringing him up - five years ago, and not so hot this year. To call them Crown Jewels, to differentiate between various music acts is difficult. You have got to have a catch-all law about the resale of tickets generally for any event. The Sound of Music was hot; for the first six months it was one of the hottest tickets you could get.

Q59 Paul Farrelly: One of the ways that an industry is regulated or self-regulated, if you take the travel industry, ABTA, every operator is bonded so the consumer knows where they are. If a firm fails, they get their money back. It is not just dodgy secondary sellers that go bust like ticket touts. Keith Prowse went belly-up years ago, as I remember. Is that an approach that the industry might consider?

Mr Edmonds: We have tried ticket insurance-type initiatives, whereby when the consumer has bought their ticket, they will be able to play a couple more pounds per ticket to cover themselves for any eventuality - travel problems, family problems - but we found the uptake of that was not very significant. I am interested to see that Seatwave, who you are talking to later, are doing a similar type of scheme. We have found there has not been a huge level of uptake on that. We think they are actually trying to get the balance right in terms of ticket exchange mechanisms, like we are doing with Geoff Ellis for T in the Park. It is a very strong approach and it protects the consumer. To go back to the earlier point, you cannot under-estimate how much the consumer needs protecting here. You had the recent example of tickettout.com, which went into receivership; over 7,000 customers lost their money there. You have to question how confused the consumer is if they are actually going to a website called "tickettout.com" and purchasing their tickets through them.

Mr Williamson: We end up picking up the pieces. These customers turn up at the George Michael concert at Wembley or the Heineken cup final at Twickenham saying, "Here is my booking sheet, here is my reference number. Can I have my tickets please?" and our staff have to explain to them that it is complete fiction. "Someone has run off with your money. That is the end of it. You have been defrauded."

Mr Wright: We are all talking about individual examples. Let us not forget that Westminster Trading, for example, received hundreds of complaints over the last few years, many from overseas visitors who had arranged their flights and their travel, had booked their Genesis tickets or their Guys and Dolls tickets, they come to this country and those tickets do not exist, or they are standing tickets at the back which they have paid 250 for. Is this the reputation we want to present to our overseas visitors?

Mr Blackburn: The other thing is Mr Davies asked who lost out? The government lose out as well because do you think these people pay VAT and tax? I very much doubt it.

Q60 Paul Farrelly: We got rid of resale price maintenance a few years ago. In July independent booksellers will be screaming blue murder about the latest Harry Potter novel. Clearly, manufacturers quite often want to influence the price so they put a recommended retail price on their product. If I go into a newsagent's and try and buy a can of Coke that has been marked up twice from that price, I can see it; I can make a comparison and say, "Yes" or "No, it's a rip-off." You have prices on your tickets. Should at the very least resellers have to advertise the price at which the tickets were issued, and, for security and public protection, also the seat numbers?

Mr Brown: Legally, if they are reselling a ticket, they have to declare the face value.

Q61 Paul Farrelly: Do they do that at the moment?

Mr Brown: Not always, I think is the answer to that.

Q62 Paul Farrelly: Should they?

Mr Brown: Yes.

Q63 Paul Farrelly: Under the code of practice, if not legislation?

Mr Brown: The majority of our members or agents are actually outside the scope of those regulations because they are acting on behalf of the event organiser. The STAR code actually bring them back into that and insists that they do display the face value and obviously the booking fee that they charge.

Q64 Paul Farrelly: Do you think that should be extended to all agents?

Mr Brown: Absolutely.

Q65 Philip Davies: This is a bit rich, is it not? We are expected to believe that Ticketmaster and friends are the champions of the consumer, the champions of the customer, standing up for the customer's best interests, despite all the articles we have seen. There have been articles in the past about how Ticketmaster rip off their customers. Let us just find out what a big champion of customer rights you are. You are a group of people who charge customers handling fees, processing fees, you charge people for postage and packing about 3 when it costs 26p for a stamp. Why should we believe that you lot are the champions of the consumer? All you want to do is make sure that you can rip off the customers rather than the ticket touts ripping off the customers.

Mr Blackburn: That is absolute rubbish. Our average mark-up is 12%, and that is not profiteering, by any business. We provide a very good 24-hour service. We provide all the checks you look for. It is absolutely wrong to say that. When you talk about the postage charges, what people forget is we have to send out a lot of tickets by Recorded Delivery and the cost of that is a lot higher, when the Government takes most of that in VAT or the Post Office takes it. We do have to say that a lot of our tickets go out by Special Delivery. That is why the postage charge is so high. The average mark-up we operate on is around 12% and you cannot say that is profiteering by comparison with any other business.

Mr Williamson: The way our business works is we charge a booking fee on tickets we sell. Out of that booking fee we are paying the credit card charges, we are paying the VAT on the booking fee, we are paying for 24/7 phone rooms, we are paying for internet sites that do not fall down when people try and book on them, we are then paying for dispatch to the customer. With the Millennium Stadium, for example, we now have to send all tickets by Recorded Delivery, which costs more money, because they have had problems with tickets disappearing in the post and refusing to issue duplicate tickets for security reasons. We are having to pass those charges on. Nevertheless, our charges, we think, are reasonable and we do not get any payment at all if we do not sell a ticket.

Q66 Philip Davies: So you do not make any mark-up on postage and packaging?

Mr Edmonds: No, absolutely. There has to be a margin there to support our business. Ticketmaster as a company employs over 700 people in the UK and we are selling a lot of tickets. What those fees cover is also the cost of processing, but it also covers the cost of investment in new technologies. If you look back to when booking fees first came into the UK, it was when the credit card/debit card culture came in. Before, 15 or 20 years ago, if you wanted to go to a big event, you would have to take a day off work and queue for 24 hours plus to get hold of your tickets. What happened with the credit card culture here is that phone rooms were set up and we now have internet sites. Those take a significant amount of investment in terms of new technologies.

Mr Blackburn: I think also the customer always has the chance to go to the box office and buy tickets without paying a booking fee. In all the theatres within our group they can do that. They have that choice. People choose not to because of convenience, and we provide 24-hour convenience at a reasonable price. Whether it is the combination of booking fee and transaction fee, as I have said, we feel the mark-up is fair to cover all our costs and the services we provide. We always make sure tickets are available at face value.

Mr Edmonds: You also have to look at the fact that everyone knows what the fees are when they are purchasing a ticket. They have that choice to make and there is a degree of choice across the marketplace. The other issue is we do not increase our fees if we could say more. For example, our average booking fee is between 9-12.5%. If we think we have a venue where we know the demand for tickets will far outstrip supply, we do not increase our fees to 25% to profiteer on that. They are proportionate to the ticket price. They are open and they are agreed with our promoters on every single event.

Q67 Philip Davies: Basically, your position is that you are quite happy for punters to pay over the ticket price to pay your profits, but you do not want them to pay over the ticket price to buy something from eBay from a tout. That is, in a nutshell, your position.

Mr Williamson: Not at all. The STAR guidelines Jonathan has just outlined---

Q68 Adam Price: It is your position, with respect.

Mr Blackburn: Our position is to provide a service at the right price which is not based on demand. Anybody can go to Blood Brothers on a Wednesday night. We charge the same for selling a ticket for Blood Brothers as we do for Glastonbury, the same percentage, so it is not driven by demand. It is driven by the cost of the service we provide. We try and keep our booking fees fair and in line with what the public will pay and what we do not want to see is a load of tickets going out to people who are instantly profiteering on them when we are trying to get tickets to the public at the right price.

Mr Brown: It is also worth remembering that by buying through the primary market, through a primary agent, you are in direct connection with the event organiser, so if there is a problem with the event, if the event is cancelled, the refunds will be processed. If you move out of that market into the secondary market, you are divorced with that relationship and you may have no rights in terms of going back to the event organiser.

Mr Wright: The primary market is authorised, is transparent, it offers refunds, it offers a service. Those are things that consumers are willing to pay for and it is entirely transparent what the ticket is, what the price they are paying is, what the booking fee is. Most of all, they possess the tickets. That is fundamentally a critical part of any fair market.

Q69 Philip Davies: It is a cartel really, is it not?

Mr Williamson: Actually, the OFT inquiry two years ago found precisely the opposite, that it was a very fiercely competitive industry.

Q70 Chairman: Can I just try and establish something? There are two pictures being painted. One is of a mechanism to allow consumers who purchase tickets and then for some reason find that they are unable to go to have a means of selling their ticket, which most people would accept is perfectly reasonable. The other picture, which is the one which you paint and some of the previous witnesses painted, is of gangs of essentially organised criminals who buy up vast quantities of tickets within the first five minutes of their going on sale in order purely to exploit their dominant position in the market to obtain massive profits. Which is true? Obviously, both go on but when we are looking at the secondary market, how much do you believe is people who never had any intention of going to a concert or event in the first place, and how much are genuine consumers just trying to sell tickets they are not able to use?

Mr Blackburn: We think about 30-35% of the tickets go out to people who want to resell them and do not go to the concert. Equally, when a ticket limit is six, you might get people who want two but they will buy six and get rid of the other four to cover the cost of the two they have bought as well. What is occurring is what is clearly colloquially known as bedroom touts. There are a lot of people who sit out there and trade on eBay and they see tickets as a commodity they can trade in fairly easily. That has really grown with the growth of the internet and people like eBay and viagogo and so on. It has given them an opportunity to trade in tickets very easily.

Mr Williamson: I think it depends entirely on the type of event because there are hot music events, hot sports events, where people are trying to over-buy and then sell on, and there are lots of day-to-day events going on week in, week out, where ticket touting is far less of an issue.

Q71 Chairman: Tom, your effort to establish a refund scheme: in your evidence you say STAR cannot support any suggestion that customers should be able to return tickets and obtain refunds if they are unable to attend or change their mind. But you then go on to talk about how you are working to establish a system of authorised resales but that will not therefore comprise an automatic refund scheme.

Mr Brown: For the very reasons that Rob Ballantine outlined before, there are distinct commercial reasons why it would be very difficult to offer returns in that way but resale mechanisms and being able to exchange tickets within the terms and conditions of sale, provision can be made for that.

Q72 Chairman: So your message essentially to the consumer who buys a ticket which he then finds he cannot use because his aunt has died, is unless that the event has sold out and therefore an authorised resale scheme is in place, he should not be allowed to sell his ticket?

Mr Brown: No. We are saying as far as entertainment tickets are concerned - and I think there is a distinction between the concerns of sport and entertainment - they should be able to sell that to a friend for the amount they paid for it.

Q73 Chairman: To a friend?

Mr Brown: Perhaps to anybody.

Q74 Chairman: How do they find the other person who wants to buy it if you have outlawed the secondary market?

Mr Brown: If you have an authorised secondary market therefore you have a means by which people can offer tickets for resale.

Q75 Chairman: But you are not proposing to put in place an authorised secondary market unless certain conditions are fulfilled.

Mr Brown: I think there is scope for an authorised secondary market.

Mr Williamson: We are introducing with a number of our clients exchange and resale policies and practices. Geoff Ellis talked about it for T in the Park. We are doing the same with the Brighton Centre. We have done it for events at Wembley Arena, at the theatres, and I think, very interestingly, we are introducing it with Arsenal football club this summer for season ticket holders and for members so that they can resell tickets for matches they cannot go to. We are trying to play our part. We are trying to move that exchange and resale forward as well.

Mr Wright: Just to be clear, the draft terms and conditions absolutely allow customers to resell their tickets provided they are not doing so for profit. So it fully recognises that need and over 65% of all the venues we have polled in terms of STAR membership already offer some mechanisms for customers to dispose of unwanted tickets through the venue. As the earlier commentators said, as we all move forward, we will strengthen and expand that exchange mechanism.

Q76 Chairman: So you have no objection to websites in the secondary market which do not impose vast mark-ups? Essentially, if it is only a small margin over the face value you would be content with that?

Mr Brown: Certainly there are sites which exist for fans to exchange tickets at face value.

Q77 Chairman: And you have no difficulty with that?

Mr Brown: No.

Chairman: Thank you.

Witnesses: Mr Joe Cohen, Co-founder and CEO, Seatwave, Mr Graham Burns, Chairman, Association of Secondary Ticket Agents, Mr Dominic Titchener-Barrett, Association of Secondary Ticket Agents, Mr Eric Baker, Founder and Chief Executive, viagogo, Mr Paul Drake, Head of Contracts and Commercial, eBay UK Ltd and Mr Alastair McGowan, Head of Public Affairs, eBay UK Ltd, gave evidence.


Chairman: We now turn to the secondary market and can I welcome Alistair McGowan and Paul Drake of eBay, Eric Baker of viagogo, Dominic Titchener-Barrett of the Association of Secondary Ticket Agents and Joe Cohen of Seatwave.

Q78 Alan Keen: Good morning. I had a discussion with some sports fans in my constituency recently when I knew we were going to do this inquiry. They talk mainly about the people selling tickets outside sports grounds, saying, "Got any tickets, got any tickets, does anybody want a ticket?" They regarded them as scum. Do you think that is a fair description?

Mr Titchener-Barrett: I think that is an ignorant position to take, nave in the extreme. I would draw a very clear distinction between selling in the secondary ticket market and ticket touting. There is a clear distinction and today all we have heard is emotional arguments based on the very worst aspects of ticket touting. We have not actually heard the other side of the story about the movements we have taken in-house to try and regulate and improve our image. I do not think that is a fair assumption. That is a very one-sided, one-eyed view of the industry.

Q79 Alan Keen: I was talking about the people outside football grounds selling tickets.

Mr Titchener-Barrett: Again, I would draw a very clear distinction between the individuals that we have here and the people that my organisation represents and those people that represent those kinds of persons. My personal opinion is that is the unacceptable face of the secondary ticket market. In fact, I would call it a tertiary market; I would not actually include them as part of the secondary market. I would say it is a tertiary market operating under their own remit.

Mr Baker: I think what you are hearing from your constituents highlights a lot of what we have heard here today, which is that where fans are unhappy it is because you deal with people who give you fraudulent tickets. It is not safe and secure, it is not guaranteed and they do not know who they are dealing with. Whether you are buying a ticket, a car, a piece of art or any good, if you are dealing with someone like that, you probably would call someone like that "scum". What we have tried to do at viagogo is create a safe, secure, guaranteed online mechanism so the fans that we work with, be it at Manchester United, Everton or Chelsea, are very happy that they do not have to deal with these characters outside the stadium, and when you give consumers a safe, secure alternative, you can eliminate the type of shenanigans that go on outside a stadium.

Mr Cohen: I would like to add to that, I think it probably helps the Committee if we explain how Seatwave works as well. Seatwave is a marketplace where people can buy and sell tickets and we provide a guarantee that we call a ticket integrity guarantee, which means that you will receive exactly the ticket that you purchased on the site in good time for the event and, if you do not, we will give you a 150% refund on your money. The other thing we provide is something called ticket cover, which is an insurance product that we have underwritten, which means - and actually, Mr Goldsmith was wrong about this - that if there are traffic delays on the way to an event, if there is rail disruption, if you are injured, if you have illness or death in the family, you will get a 100% refund for your ticket. If the event is cancelled and rescheduled at a time that you cannot attend or it is not rescheduled at all, you will get a 100% refund not only on the price of the ticket but on any market that was involved and any booking fees involved, and that is at no additional cost to consumers; we underwrite and pay for that entire cost. There is no-one in this room who can say that they do the same thing to protect consumers in the way that Seatwave does.

Mr Burns: With respect to my colleague Mr Cohen, ASTA was formed, as many people are aware, to really create an aura of confidence within the secondary market and these guidelines that Mr Cohen talks about are exactly the guidelines that we adopted as an association off the back of the guidelines used by the National Association of Ticket Brokers in America, with whom we are associated.

Q80 Alan Keen: At least some of you sell tickets above their face value, which is against the terms and conditions of those tickets. How do you justify that? Are you happy about breaking those terms and conditions?

Mr Titchener-Barrett: I think we in Britain live in a western pluralist liberal democracy where the free market reins. We live in a laissez-faire world of economics.

Q81 Mr Sanders: So does the rule of law.

Mr Titchener-Barrett: What difference does it make if one in five houses in London are now owned by property investors? In my opinion, it is a free-market investment. Why should people not be able to buy and sell? To enforce it would be extremely difficult.

Mr Baker: I think, again, it is important to realise that people should be free to buy and sell and, of course, we do live in a rule of law country, which we all obey. Our point of view on it is that consumer protection is very important in this country and there are very strong consumer protection laws that protect the consumer and mean that only certain terms and conditions are enforceable and fair, and simply because someone puts a term or condition on, if it violates a consumer's right, for example, that they have purchased something and they have the right to sell it on, we do not think that would be enforceable but certainly people have the remedy of the courts if they would wish to test that and they believe their terms and conditions are enforceable. We believe the proper forum would be the court.

Q82 Mr Sanders: What bit of "not for resale" do you not understand?

Mr Baker: Again, it is our respectful position that if someone has purchased a ticket, they have the right to sell their ticket on, in the same way that if I purchased a book, I have the right to sell the book on, regardless of whether or not the publisher says that they want the terms and conditions to say you cannot resell that book. We believe that is an example of a term and condition which would not be fair to the consumer.

Q83 Mr Sanders: You make the law.

Mr Baker: No, sir. The Government makes the rules and obviously we would interpret the rules but we feel that the consumer has a right to sell it on. If there is a problem with a consumer breaking a term and condition, then we believe it would be between that body and the consumer and they certainly should take up that issue.

Mr Cohen: I would add to that that the Unfair Contract Terms Act 1977 suggests that a standard term is unfair if it is contrary to the requirement of good faith and causes a significant imbalance in the parties' rights and obligations arising out of the contract to the detriment of the consumer. There is also a suggestion that terms need to be reasonable, or an exception to a term needs to be reasonable, and we do not believe there is a sense of reasonableness that something should not be sold above face value.

Mr McGowan: It is also interesting that the OFT in their evidence to the Committee have suggested that the terms and conditions which are attached to some of these tickets are potentially unfair. So if the OFT had doubts themselves, I think we are perfectly entitled to allow the resale of these tickets.

Q84 Alan Keen: Many ASTA members and some of you here today are already selling tickets for the rugby next year. Do you not think that is wrong? You heard the rugby people mention that earlier this morning. If tickets have not gone on sale yet and you are selling them, do you think that is acceptable? How do you justify it?

Mr Cohen: Again, I would take the view that we have terms and conditions and a limited user agreement within our service, and part of that limited user agreement says that if you sign up to this service, you have to abide by these rules, and one of the rules is if you list a ticket for sale and it sells, you then have to deliver that ticket. So long as that person is abiding by those rules, no, it is not wrong.

Q85 Alan Keen: What if you cannot deliver the ticket? What do you do in those cases?

Mr Cohen: We take a guarantee from all of our sellers, so everyone who lists a ticket for sale on our site provides us a debit card or credit card and in the terms and conditions it says if they do not deliver the tickets, we have the right to purchase alternative tickets and charge their debit or credit card for them. Everyone who sells tickets through Seatwave - and I believe viagogo is the same - has to enter into that limited user agreement and stand by it. In that way we are able to provide a guarantee.

Q86 Chairman: So you are selling futures. Are you selling futures on Seatwave, like the example that Alan gave of tickets that are not yet on sale?

Mr Cohen: No. In our limited user agreement, again, we say you have to own and possess the tickets that you sell.

Q87 Chairman: So there are no Rugby World Cup tickets on sale on Seatwave?

Mr Cohen: There are Rugby World Cup tickets for sale, but those have been for sale already. Those have gone on sale.

Q88 Alan Keen: Are there no limits to what you would do? Take Live Earth, for instance, Live Aid. That is a charity. Do you not feel that was at least something you should have refused to put on your site? I think you have all got them.

Mr McGowan: With Live Earth in the US we did a deal whereby 20% of any of the resale value then went back to the charities concerned. It is important to stress that when a charity sells a ticket, they obviously get the money from the primary sale. What we have done with eBay and the deal with Live Earth is given them an opportunity to raise more money for good causes also from resale. We think that makes sense. It means that the consumers can still resell their tickets and the charity also benefits from it.

Mr Drake: eBay has a mechanism to raise huge amounts of money for charity in this way and this is something that we are looking at. For example, in the US, the equivalent programme in the US, they have raised over $100 million since the start of the programme. There is huge scope there for fund raising that we as eBay are interested in pursuing.

Mr Burns: I would like to interject because the charitable tickets, I think, need to be taken on a case-by-case basis. One of our members, Get Me In, who operate an organisation on a very similar model to Seatwave and viagogo, are listing tickets for the Diana concert this coming weekend. Those tickets have actually been put on there by one of the charities, so I think it would be wrong to say, "Look, you are selling charity tickets here." Those tickets have been put on there by one of the charities to raise money for that charity, and I know that the CEO of that organisation has donated all the proceeds from that sale to that charity also. I think we need to be very careful with charitable tickets but it is a well-made point.

Q89 Paul Farrelly: Can I just interject? Get Me In, one of your members, as you mentioned, are advertising tickets for the 2008 Heineken Cup Final which are not on sale yet, and they are advertising them at Twickenham Stadium, London where the final will not take place.

Mr Burns: I am sorry. I cannot comment on that but I am grateful to you for bringing it to my attention.

Q90 Paul Farrelly: That is one of your members.

Mr Burns: I am grateful to you for bringing that to my attention but I cannot comment on that because I am unaware of the item being offered there, but I will now enquire as to why that is and the circumstances surrounding that.

Q91 Paul Farrelly: I do not think, Chairman, we have a list of ASTA members. Could you send us one, please?

Mr Burns: I certainly will, yes.

Q92 Paul Farrelly: So we can do a bit more research that you have not done on some of the practices of your members.

Mr Burns: Yes.

Mr McGowan: In response to your question, one of the things we have done as a result of the ticket tout summits with the DCMS is that we have acted in response to a request from event organisers to take down tickets for events where, for example, the date has not yet been announced or tickets had not gone on sale to the public, either through fan clubs or debentures or any other means, and where they have spoken to us and said, "Will you take down these tickets because there is no possible way that this person who is claiming to sell a ticket could have it," we take it down those listings. So as far as we are concerned, we would not condone future selling of that sort.

Q93 Helen Southworth: How many complaints have each of you had from consumers about either fraudulent or unfair sales? We have the example of Seatwave where a ticket was right at the back, with poor visibility and nobody knew so until they had paid all the money out for the ticket.

Mr Cohen: Can I comment on that? I think it is a great example of the value of Seatwave. Nick came up and showed some tickets for sale that were obviously very bad seats and very high priced and, you know what? They are still for sale. No-one has bought them, because you have complete visibility into all of the tickets that are available in the marketplace and you can see exactly where those seats are.

Q94 Helen Southworth: How many complaints have you had from consumers who have not been satisfied with their purchases, either because they were fraudulent or unfair?

Mr Cohen: An exact number of complaints? I could not tell you. I could write to you later and tell you exactly how many we have had and how we deal with them.

Mr Baker: I would like to give you a very direct answer to your question. We have not had any complaints from consumers about fraudulent tickets or unfair practices. In fact, it underscores what we are trying to do. We really do work for the fan, because that is our customer - not the venue, not the league, but the fan and the consumer, the hard-working person who bought a ticket, wants to sell it or wants to buy it. But the quick answer to your question, as a matter of fact, is that we have not had any complaints about fraud and about inefficiencies.

Q95 Helen Southworth: Or unfairness?

Mr Baker: Or unfairness. We have heard many complaints from people who do not like the current system and have told us that the reason they used our site is because they have had complaints about unfairness and a difficult process dealing with someone out on the street or dealing with rogue websites. That is what we exist to deal with.

Q96 Helen Southworth: What about eBay?

Mr McGowan: I cannot give you a specific number in relation to tickets, but in relation to our general fraud statistics, they are very good by industry standards. I think it is something like 0.06% of what we call our gross merchandise volumes. That is the total value.

Q97 Helen Southworth: It is tickets that we are particularly looking at at the moment. If you could give us that information, that would be very useful.

Mr McGowan: I do not have those figures available with me just now but I am very happy to.

Q98 Helen Southworth: You have not done a check on the situation?

Mr Drake: We would not necessarily have access to that. We are not involved in the transactions, so, if there is a complaint, the buyer might go back to the original seller and complain; outside of the eBay website, we would not necessarily know.

Q99 Helen Southworth: You do not have a mechanism set up to deal with complaints?

Mr Drake: We have a feedback mechanism on eBay and there are thousands and thousands of positive feedbacks left by happy buyers when they have received their item. That is one indication as to the general high level of consumer satisfaction.

Q100 Helen Southworth: But you will be able to give us the information about the complaints?

Mr McGowan: We are very happy to go and see what we have available.

Q101 Helen Southworth: How many complaints have you had of either fraud or unfairness?

Mr Burns: I ran a very interesting series of advertisements in the Sunday Mirror and Daily Telegraph newspapers and it unearthed a plethora of complaints, because I had asked for a general "Has anybody had any bad experiences?" and I found that by far the largest volume of complaints - and I am happy to provide these to the Committee - were from primary sellers. That is not without surprise because they sell the greatest volume of tickets but one of the biggest complaints was the lack of ability to contact the primary seller in case anything went wrong. That would be Ticketmaster, Seetickets. I will happily forward these to you. One of the objectives of ASTA is to be a point of contact for the general public. Our telephones are always open; there is always somebody at the end of the telephone and you can contact us. Putting that aside, I did do quite a lot of research into the reasons for complaints, and they are wide and varied.

Q102 Helen Southworth: Can I also ask about selling on of free tickets? Do people believe that it is fair to provide a platform for selling on free tickets? Quite often they have been provided at public expense for the public.

Mr Baker: I can certainly answer: viagogo's point of view we put in our written submission. As I said, we believe that if someone has paid their hard-earned money for a ticket, it is theirs, they own it and it is their right to sell it on. However, in the instance that you highlight, if it is a free event, they have not paid their hard-earned money and this is a different type of example. We believe that, if you look at specific circumstances, for free events we think it is reasonable to have a restriction of not allowing people to sell on because they have not purchased something. We also think, in the interests of public safety, as it is with football. Those would be the two exceptions we see.

Q103 Helen Southworth: So you do not carry them?

Mr Baker: Correct.

Mr Cohen: We do not carry tickets for free events either.

Mr McGowan: This is one of the issues that the Government asked us to look at. This is something we are actively looking at but we cannot give you a detailed answer at this stage because we have to consult internally with our colleagues but it is something are actively looking at and something where there is a genuine debate to be had.

Q104 Helen Southworth: When will we be able to get the response?

Mr McGowan: We will give it to you as soon as possible. Obviously, we have to consult with colleagues in other marketplaces and also elsewhere in the company, but I am very happy to come back to the Committee in due course, when we have a definitive answer.

Q105 Chairman: Surely, if you accept that if a promoter decides to give away free tickets, it is wrong for you to sell them? Surely, a promoter is also entitled to decide to give away or to sell tickets at a low price, and, on the same logic, it is wrong for you to charge a huge mark-up on them, or for you to allow others to sell them at a vastly inflated price?

Mr Baker: Respectfully, our position at viagogo is that once you have sold something to someone at any price, someone has purchased something with their hard-earned money, and whether it is 50, 5 or 100, that can be a lot of money to people. It was their money and they have decided to purchase something. If the promoters decided that they wanted to give the tickets to charity for free or to give them to certain people in a fan club and those tickets are free because they want that group of fans to be there, we think you have not taken any money and therein, in our opinion, lies the distinction.

Q106 Chairman: Can I ask eBay specifically: you attended the DCMS summits, where I understand a statement of principles was agreed, but you were then asked by the Concert Promoters Association if you would do a number of things such as insisting that details of seat positions, of block numbers, rows, should be displayed, that you would supply details of known touts, and you refused to accept any of the requests put you, I understand.

Mr McGowan: In respect of the two issues you raise there, firstly, in respect of details of our users, as we said at the time and have said to DCMS on numerous occasions, we cannot provide details of our users where that is in breach of our privacy policy and in breach of our Data Protection Act obligations, particularly when no-one has actually done anything to break the law. We take privacy very seriously. We cannot start breaching our privacy policy. In respect of seat numbers, our general position would be that we would love to have as much information and transparency available to consumers as is possible and as is commensurate with the effective operation of a secondary market. The difficulty with seat numbers is that then people use those seat numbers to void the tickets. To take a step back from all this, we would argue that someone has to have the right to be able to resell a ticket if they have bought it, particularly when they do not have the right to a refund. Therefore, if they have the right to resell it and people are cancelling those tickets on the basis of those seat numbers, that completely undermines the whole notion of a secondary market. If you accept that there should be a secondary market, that is the sort of thing we should be going against. What we do however provide is a lot of information on the site, for example, the face value, we have also changed to item specifics recently in response to the tickets touting summit so that there is more information about the general section of the venue and also there is more information about whether there is a restricted view or not. So the short answer is we would love to have as much information as possible but if that information is then used to end the secondary market, that is where I think we have a problem.

Q107 Chairman: Why do you not allow primary agents to advertise?

Mr McGowan: Can I just deal with this? This was actually a very specific issue about banner advertising. We have absolutely no problem with primary agents selling and listing tickets on eBay. If they want to do that, we would welcome it; the more competition, the merrier. What they want to do is effectively put a banner up on the site which will drive traffic away from our site on to their site. It is like Tesco saying to Sainsbury's "We would really like to put a big banner right outside your shop which says 'Come and shop at Tesco's.'" I think Sainsbury in that instance is entitled to say "Thanks but no thanks."

Q108 Paul Farrelly: Just a very quick-fire round here. Firstly, to Mr Burns. Thank you very much for agreeing to send us a list of your members. How many members do you have?

Mr Burns: Fifty-eight.

Q109 Paul Farrelly: We have heard - and this is a question to your colleague Mr Titchener-Barrett, who, if I am not mistaken, called my colleague Alan Keen ignorant and one-eyed earlier - we have heard that the Secretary of State has expelled the Association of Secondary Ticket Agents from attendance at the second summit. Why do you think that was?

Mr Burns: I am sorry. I am oblivious to that event.

Q110 Paul Farrelly: Did you attend it?

Mr Burns: I did not, no. I was one of the founder members of the Association in December 2005. I left the Association early last year and I have been brought back in again just recently.

Mr Titchener-Barrett: I joined ASTA two months ago in its format as public relations so I was not privy to that.

Q111 Paul Farrelly: We have had heard that evidence. If you wish in the follow-up to give us your version of events, that would be welcome.

Mr Burns: I would be very grateful for that opportunity, yes. Thank you very much.

Q112 Paul Farrelly: To Mr Cohen and Mr Baker, I am very interested in how you set your sites up. We have heard of some sharp practices whereby people use very sophisticated methodology to extract the maximum number of tickets using the Internet calling system. Do you collaborate in any way in setting yourselves up or in ongoing operations with that sort of activity?

Mr Cohen: I do not how you would describe "collaborating". If the marketplace works well and people want to sell tickets, I guess you could accuse us of that, but our service is available to consumers who want to come in and sell tickets and abide by a code of conduct of how those tickets are listed and how they are sold and how they are delivered. It is very straightforward, I do not know of sophisticated systems and other conspiracy theories that people have, I have not seen any evidence of that and I am not aware of it.

Q113 Paul Farrelly: You can understand "collaborate" in whichever way you like. It is plain English really: court, encourage, collude with?

Mr Baker: I can only speak for Viagogo. The quick answer is no. We are a marketplace. We do not take any inventory of these tickets, we do not concern ourselves with whatever mechanisms they may be, and we are not a member of an Association of Secondary Ticket Sellers because we are not a ticket reseller. We are simply a marketplace where all we are looking to do is make sure people in our marketplace play by the rules in a safe and secure fashion, so the short answer to your questions is no, we do not.

Q114 Paul Farrelly: Mr Cohen, I understand the answer to my question is "Perhaps, maybe and yes, it is legitimate"?

Mr Cohen: It is no, we do not collaborate. We are a marketplace.

Q115 Paul Farrelly: So if you were to open up your history and books to anyone who wants to come and examine your operations, how you had established yourselves, they would find you squeaky clean and they would say it was tickets by accident?

Mr Cohen: I think so, absolutely.

Q116 Paul Farrelly: And you again, Mr Baker?

Mr Baker: I know so.

Q117 Paul Farrelly: A final question to eBay, you say in your evidence that you are just an exchange as well and actually when it comes to rights of resale or not that should be for the parties themselves to thrash out, but that is complete rubbish, is it not, because in Australia you sued a promoter who reserved the right to bar people who had re-sold their tickets from coming to events? The reality is that, unlike our Office of Fair Trading which is timid, you are aggressive in protecting your ability to trade, are you not?

Mr McGowan: Firstly, in respect to your question about the marketplace, with our marketplace, and if you look at the stats our research shows that nine out of ten people had sold over the course of a year five tickets or less and 60% had sold just one, so that suggests to us that the sort of people who are selling tickets on eBay are individuals with spare tickets. To deal with the Australian question, there the issue is you have an event promoter saying, "We are not allowing resale, we are not allowing refunds, and we are going to cancel the ticket as well." We have a similar practice here in you the UK. Seetickets.com have pretty much the same policy, which is they do not allow refunds, they do not allow resale and then they say if you try to resell it they will cancel your compensation. That does not seem to be very fair to the consumer.

Q118 Paul Farrelly: If you are an exchange why did you sue, why did you not let the parties sort it out?

Mr McGowan: Because in this particular instance we wanted to stand up for the consumer.

Mr Drake: And we were successful.

Mr McGowan: And a court of law found in our favour.

Q119 Paul Farrelly: So you are player not an exchange?

Mr McGowan: We vigorously defend the rights of people to be able to resell their tickets because we believe in the secondary market. Just as other individuals here are vigorously in the game of trying to close up the secondary market, we are obviously vigorously defending the right of people to be able to resell tickets, and why should they not?

Q120 Mr Sanders: Why do you not - this is to each of you in turn - require sellers to place the ticket serial number when they are advertising? What are you afraid of if you are so legit?

Mr Baker: If you are selling used books you do not have to put the ID of the actual book, the SKU number or whatnot. We are simply a marketplace. What we know for sure is that if someone buys a ticket from our marketplace they are going to get the ticket, it is going to be a good ticket guaranteed ---

Q121 Mr Sanders: You do not buy a book to go into a concert, do you, you buy ticket, we are talking about tickets not books, and tickets have serial numbers that could be very useful for public safety at a football match for ensuring that fans are segregated, serial numbers could be very important for ensuring there are not fraudulent tickets out there that go beyond capacity and therefore endanger people's lives; why do you not put the serial number up?

Mr Baker: Obviously I share your passion for safety and security and for the guarantees and that is why ---

Q122 Mr Sanders: You do not, in my opinion!

Mr Baker: I understand. We work with Manchester United, we work with Chelsea, we work with Everton, we work with a number of football clubs. In fact, I believe we are the only people in this room who operate legally an exchange with football tickets. What they have found, at least in the opinion of those clubs, is that everything has been safe, secure and guaranteed and it has been a step in the right direction of safety because the key to the entire network is that it is auditable and trackable who is selling the ticket and we know who is registered as the seller. Anyone could enter any other type of information they want but the key thing here is that we have an auditable, trackable network, and for example if you wanted to know exactly who was selling X, Y, Z tickets and you had a legal explanation, which of course as my good friends from eBay say would trump any privacy protection, we would be able to provide it, in contrast to the Wild West out there where with people on a street corner you have no idea who you are dealing with and there is no way to track it. Registration is the means to secure and protect rather than an ID number on a ticket, respectfully.

Q123 Helen Southworth: If you want to protect your consumers, and I am particularly thinking of the evidence that has just been given by eBay, what code of conduct would you wish to see across the industry?

Mr Burns: If I may answer this question. We are actually working with the Office of Fair Trading along the same lines as STAR, and my colleague Jonathan Brown has his set of ethics or terms under which his members operate, and we are working with the Office of Fair Trading to ratify a code of ethics or a standard of trading for the members of ASTA. We believe that a course of self-regulation is the best course of action.

Q124 Helen Southworth: I accept that but what would it contain; we have not got a lot of time?

Mr Burns: It contains very similar sorts of guarantees that both Seatwave and Viagogo have, frankly, adopted from the ASTA code of ethics, so a guarantee that you will get a 150% refund if the man does not provide the ticket, you will get a refund if the event is cancelled. We are working towards, although it has not been widely received, a code of bonding very much along the same lines as ABTA. We have employed independent arbitrators to step in if there should be a dispute between a buyer and a seller. It is a long process and we are well down the road.

Mr Cohen: Can I add to that that we have actually met with and written to Jonathan Brown of STAR on several occasions and suggested that the secondary marketplace and secondary agents work with STAR and the industry as a whole to come up with a code of conduct/voluntary regulation that works for all of us. On two or three separate occasions we have been rebuffed by STAR and I think it is what lies at the heart of the industry's complaints that this is really about commercial competition as opposed to what is best for consumers, and we would like to engage with the wider industry and make sure that we have a voluntary code of conduct that protect consumers.

Mr Burns: I have here a note from the Department of Culture, Media and Sport indicating that the primary market should work with the secondary markets' representative ASTA to come up with some sort of code of conduct, and despite my various emails and telephone calls, I have yet to receive a response from the primary market?

Mr Baker: Again answering your question very directly on what I believe you asked, we believe that the key issue is to protect consumers by having this safe, secure, guaranteed system registering buyers and sellers and making sure a buyer knows they are going to get the ticket and they are going to get it on time for the event. We think if you do that you protect consumers' rights and you will be in a position where you know that you will not have complaints from fans and consumers about any unfair practices or tickets and that is why we are very proud of what we have done and why we have not had complaints.

Mr McGowan: We would also argue that there ought to be at the heart of this a requirement for a consumer redress system to be in place for where things go wrong in a particular marketplace, and that seems to be eminently sensible. There are other things which we do in relation to face value which I think I would like to see replicated across the industry. The other thing we would want to see is the marketplace kept as open and as competitive as possible because I think what this debate is really about is not whether you should have a secondary market, because we think the case for a secondary market is pretty obvious, but you should have the right to be able to resell your ticket, particularly when you do not get a refund. The issue is what sort of secondary market do you want. On the one hand you have event organisers who would love to have a resale market which is determined by them, where they get to say who has the right to resell a ticket and who does not and by doing so they then get a share of the profits. We think it is much better to have a much more open and competitive resale opportunity. For example, there was much discussion earlier on about ticket exchange that Ticketmaster operate - there Ticketmaster still take 10% of the final sale value. Why should people not have the opportunity to go to eBay where the fees are considerably less? Surely competition will protect the consumer far better than trying to close up the market and saying that only certain people are authorised to resell and others are not.

Chairman: We are going to have to stop it there. Thank you very much.

Memoranda submitted by the Department of Culture, Media and Sport and the Department of Trade and Industry and the Office of Fair Trading


Examination of Witnesses

Witnesses: Mr Shaun Woodward MP, Parliamentary Under-Secretary of State, Department of Trade and Industry; Margaret Hodge MBE MP, Minister of State for Industry and the Regions; and Mr John Fingleton, Chief Executive, the Office of Fair Trading, gave evidence.

Q125 Chairman: Can I finally welcome to the last part of this morning's hearings the Minister of State for Industry and the Regions, Margaret Hodge; the Permanent Under-Secretary of State, Department of Culture, Media and Sport, Shaun Woodward; and John Fingleton, the Chief Executive of the Office of Fair Trading. Can I first ask Shaun, you have held a number of summits at the DCMS to look at this question of ticket touting and I understand that you have reached a conclusion that there needs to be a statutory approach of some kind. Can you just tell us what the present thinking in the DCMS is as to what needs to be done.

Mr Woodward: First of all, good morning and thank you for asking us to be here this morning. We have held now four summits at the DCMS over the last 12 or 15 months to look at this issue, specifically with a recognition that at the DCMS, unlike the DTI, our remit is to preserve the health of the various sectors sport and the creative industries. The DTI obviously has responsibility for consumer protection with the OFT in relation to this. We held the summits originally so that we could learn more from those putting on events - music or sporting events for example - but also from those who were involved in selling tickets for these events so that we could try and get some sense of the scale of the problem. I think it is important to put that on record first of all because for 90% of people trying to get tickets to a sporting or music event there is not a problem, the market works very well. That does not mean to say that we take a view that there is not a problem, but it is extremely important at the start I think to make sure everybody understands that we have not got some epidemic in relation to the sale of tickets to these events, but for a small minority there is a significant problem, and therefore in trying to get a grip on the problem through the summits what we were anxious to do was to find a proportionate way through which at the end of the day might alleviate the problem for the minority (which is a considerable problem) but would not damage 90% of the market where it works effectively. We reached a view which is that we needed to improve the terms and conditions and try and produce clarity for the consumer in relation, for example, to the sale price of a ticket, the position of a ticket, and we needed to deal with the problem of the Internet for example in relation to future selling, but what we wanted to do most of all was achieve this through self-regulation because we continue to believe that self-regulation of the industry and of these events remains the best way forward. Where we now are is in a position where we believe the market has got better but it is certainly not cured of some extreme excesses that continue to take place, so we are at the stage now, Chairman, whereby we are wrestling with the small proportion where there is still a problem. It is a serious problem for those who are actually adversely affected by it. It is a slightly different problem for sporting events than it is for creative industry events and therefore a range of options continue to sit before us. We continue to want to work with industry to improve self-regulation. We certainly believe that better information for the consumer is a desirable goal that we should all work towards and we would still like to see where the excesses take place a resolution by the industry, both those who put on the events and the primary and secondary markets. We still maintain that as a very, very last resort (and we are not at that point yet) we might have to consider regulation, but again we should be very cautious in thinking that regulation is a simple solution; it is not, and there is plenty of evidence around the world. Look for example at New York this year where they are bringing legislation in to revoke previous legislation which prevented a secondary market from operating. It is an easy solution to jump to if you think you are in an in extremis position but in practice it may not actually do that much to help the minority that is affected at the moment, and it does run the risk of damaging the 90% of the market which at the moment works well.

Q126 Chairman: I entirely share your desire to achieve self-regulation if it can be achieved. I think our experience of the last two hours is that we are some way away from a meeting of minds of the various players in this particular business and I would not be optimistic that self-regulation can be achieved. If that is the case and you have no alternative, what kind of regulation would it be? Would you go so far as accepting the argument being made by the entertainment industry and the sports bodies that we should ban the secondary market?

Mr Woodward: I do not believe that a ban of the secondary market is either in the interests of the industries that will be affected or indeed the consumer, and indeed I have not yet seen any evidence from the consumer, who after all is the group that we particularly want to protect and it is the group that particularly brought us the problem, that it would help them because, by and large, I think we have to make a distinction in the secondary market between one consumer who wishes to sell - for perfectly legitimate reasons, maybe they are ill, maybe they cannot go - his or her ticket to somebody else maybe at the face price, maybe at less than the face price, maybe at a little bit more, from unauthorised exploitation by, effectively, an industry that is growing up particularly through the Internet which may be producing excessive profits. Having said that again, the consumer is very clear about this; the consumer wants a secondary market, the secondary market being one whereby they can resell their ticket. What the consumer is also, by and large, very clear about is that it does not want to see ticket touting on the Internet or anywhere else taking place whereby unauthorised selling takes place solely for the purpose of exploiting considerable demand for an event which outgrows supply and people making huge amounts of profits which prevents people having fair access to sporting events, an extremely important Government goal, but also for example to major concerts that take place, those sorts of things, and one step that we are in the process of looking at there, which I think still is an interim measure here, is the concept of "Crown Jewels" protection which may be one way forward that we certainly would want to consider, flesh out and probably bring forward before again we consider the legislative option.

Q127 Chairman: And is the DTI at one with the DCMS on this?

Margaret Hodge: Our interest comes from trying to ensure proper competition and protection of the consumers and transparency. Whilst Shaun has been deeply involved with the summits and with representations he has received in a much more detailed way than I have on this issue, I think we would take an enormous amount of convincing to think that at this point we would want to contemplate legislation which would put a ban on secondary ticketing. I think there is quite a lot of work that we still need to do to get those minds to meet a little better, which I think will improve the transparency and enhance competition in a proper way and, for example, arising out of the OFT report they did in 2005, there are negotiations around terms and conditions which have, as I understand it, yet to be completed, and let us see whether that does not improve transparency because that is what actually the consumers want. Then we are transposing the European Directive on these issues into UK legislation and that again will strengthen the regulatory framework to get that transparency and enhanced competition. I am pretty sceptical of the need for further legislation.

Q128 Paul Farrelly: I wanted to address some questions to Mr Fingleton but just before I do there has been some controversy about whether or not the Secondary Ticket Association was expelled from the second of your four summits, Shaun. The English Cricket Board has told us that they were because of disagreement about the basic practices but from the previous session there was a shrug of the shoulders which said, "What us, gov?" Can you clear that up for us?

Mr Woodward: They were not expelled, they just did not come to the next summit. First of all, I am trying to answer on behalf of my predecessor but I will actually be able to do quite fairly. The purpose of the summit originally was to bring those who thought there was a problem together. In fact, what we felt, I believe, after the first summit, and as I say I only came in for the third and four summits 14 months ago, was that the problems we were trying to address were not being assisted by their continued presence at those summits. That being said, let us be clear about this because it is possible to create an atmosphere of mischief where there is not one, it was not the intention at the end of the day to achieve a resolution that one party could not sign up to. The purpose of this was to understand the problem and try and grapple with the problem and it is perfectly clear, as you have suggested, from this morning that there is a huge divergence of views about how to go forwards on all of this. What we were trying to do at the summit was to actually glean what was the real problem for the consumer, bearing in mind that our job at DCMS is to preserve the health of our sectors, the access to sporting events, the access to major creative industry events, and in order to understand that problem that is what we believe should be done. I think there are two more things worth saying here. I think this is a bigger problem now in terms of its perception than it was when the OFT did their report in 2005. I do not think that those members of the fourth estate here this morning were writing about it in the same kind of repetitive front page way (and that is not a criticism, it is a just an observation) that they now are. I think it is a bigger problem, although not necessarily in terms of the scale being one that is greater but the perception of it is greater, and the resolution of this remains as important as it did when we started. However, I emphasise to you this, Paul, I do not think there is a simple resolution to this. If you look at what is happening in America where they are repealing the legislation, if you look at what is happening in Australia where one part of Australia is repealing it and another part of Australia, Queensland, is bringing forward legislation, there is clearly no clear consensus on how to act. The one thing that remains in our minds throughout all of this is that whatever we do must a) be proportionate and b) it must not damage the 90% of this that currently works very well.

Q129 Paul Farrelly: So with respect to our friends in the secondary market, is the accurate position that they were not being helpful at the first summit, presumably because they did not think there was a problem, so therefore they were not invited to the second and possibly subsequent summits?

Mr Woodward: You will probably find there were other organisations that would like to have taken a larger part in the second, third and fourth summit. That has not meant to say that we are not prepared to meet them or that we do not take seriously what they have to contribute because the solution to this will be, particularly if it is by self-regulation, by everybody playing a role.

Q130 Paul Farrelly: Okay, so we have sort of cleared it up.

Mr Woodward: I have tried.

Q131 Paul Farrelly: Mr Fingleton, I have followed the affairs of the OFT for about 20 years now and when I read your evidence, or whoever drafted it, I found it very thin and not terribly satisfactory, which was not a surprise to me. One of the holes in your evidence is that you do not make any comment on the legislation with respect to football tickets or the Olympic legislation, in particular whether you think those bits of legislation will contravene the terms of the Unfair Consumer Contracts Regulations. You do not address that issue at all.

Mr Fingleton: I think with the Olympics obviously that legislation is intended legislation. I think that there may be an issue there for the Department to look at whether it contravenes European competition law, which is a different matter, and I do not know if any assessment has been done on that. If primary legislation restricts secondary sales by individual consumers and European or UK consumer law gives people that right, ultimately it is going to be a matter for the courts to determine, and until there has been a case that determines that I do not think we would be trying to set out a definitive view on a question like that.

Q132 Paul Farrelly: We are getting into another realm where I find the evidence unsatisfactory because you do make plain that only courts can decide, but if we were to take the issue of banks and credit card companies you have made that point there as well (and you have reviewed one and you are doing the banks at the moment) and the industry is crying out for a test case, while county courts are groaning under the weight of people reclaiming what they see as unfair penalty charges, but you are not helping to sponsor a case to resolve the conflict.

Mr Fingleton: And that is consistent with our legal powers to take cases because we are not able to take individual cases on behalf of consumers, that is not in our statutory mandate.

Q133 Paul Farrelly: Do you not think you should be more proactive in this arena as well as other arenas?

Mr Fingleton: I think our role is very much in this area. We have been proactive in looking at this issue. We reported on it two years ago including the effect of the Internet in looking at that and trying to deal with what we saw as a widespread public concern. So I think the OFT has been very proactive in looking at this issue well ahead of time. As a result of that there is a good deal of evidence available to this Committee and to others on the basis of what we have done and I think our view on that evidence is that we do not think a ban on the secondary sale of tickets would be in the consumers' interests as a whole. I think that is our position. We have tried to set that out very simply and I am sorry if it appears thin but it is a very simple proposition.

Q134 Paul Farrelly: Some people in the audience or in the Committee reading your evidence might actually conclude that if this is the OFT's position then why is the DTI and DCMS bothering holding these sessions at all? How are you now actively trying to promote a middle way if not through legislation then through a code of conduct? What is now holding up an agreement with the Society of Ticket Agents and Retailers?

Mr Fingleton: We look before we intervene in the market at ensuring that the changes in the market do not harm consumers overall and, as with any change like this, the effects are complex and we try to trace them through before we intervene, I think voluntary agreement around this would be much faster than litigation so we have been working with the Society of Ticket Agents and Retailers on model terms. Some of those changes have already been agreed and we expect to have agreed final terms with them in August of this year. We have worked separately with the Committee on Advertising Practice to get guidance out on the face value of tickets and this is something that we have already indicated in a different context, that of airline pricing, that we are prepared to litigate on in order to establish the principle that consumers should be shown the upfront price/final price that they are going to pay. I think our selection of the airline sector as a case in which to bring that forward is to establish that principle in law in court and to find the right market and the right case to do it, and bringing a case in one sector would have application across a range sectors, so I think we are doing a number of different things in terms of consumer protection in this area. We are also working with the Trading Standards Service. The most complaints that we get about secondary tickets are not actually about prices. We do not see much evidence of consumer complaints about prices. It is mostly about things that are already covered by consumer protection law. Those include things like being told this is a good seat and it turns out it is at the back, or it has an unrestricted view and it has a restricted view, and this is already covered by consumer protection legislation. We are working with Trading Standards to try and ensure that the law in this area is enforced. Trading Standards, as you may know, have over 60 priorities. The Rogers Report looked at trying to whittle them down and certainly secondary ticket agency is not even one of the things that was in the original 60 priorities, so they face a lot of competing claims. We as an organisation face the challenge of trying to adjudicate how much more effort we put on ticketing services as opposed to things like payment protection insurance, complaints about house-building, about areas like for example second-hand car dealers, and a whole lot of other issues, which in terms of the consumer complaints we get - televisions, mobile phone service contracts and so on - are things that are scoring tens of thousands of complaints.

Q135 Paul Farrelly: If we can come back to this, you are going to have an agreement in August?

Mr Fingleton: Yes.

Q136 Paul Farrelly: What are the main headline terms of that?

Mr Fingleton: I am not going to say what the details of that are until we announce it. I think that the primary gist of that is to ensure that the arrangements the industry are coming up with are a) compliant with competition laws, there is no sense of them restricting competition and b) at the same time increasing consumer protection.

Q137 Paul Farrelly: Under the agreement that you are going to announce in August, if I go on to a ticket site and pay my money over for a ticket, am I going to at least know they have the ticket, where I am going to be sitting, and other things that are of interest to me as a buyer? Is that going to be part of the agreement?

Mr Fingleton: I cannot say that at this stage. What I can say is that the primary focus there will be around what restrictions they can put on the resale by consumers of tickets and linking that to whether refunds are available.

Q138 Paul Farrelly: Was that a yes or a no, just the basic terms of why I buy a ticket to give consumer protection?

Mr Fingleton: Yes I think at that level of specificity I cannot say yes to every individual item but that is what we are working towards.

Q139 Paul Farrelly: It is not very specific, it is actually what people are concerned about. Can you give us some comfort on that?

Mr Fingleton: I think we will give comfort in August on that when we have concluded those arrangements.

Q140 Paul Farrelly: You will be giving comfort in August on that point?

Mr Fingleton: Yes, I think we will be setting out very clearly in August what has been agreed.

Q141 Paul Farrelly: So I will find out in August?

Mr Fingleton: Yes.

Margaret Hodge: Chairman, can I just come in because as the sponsor department for the OFT I would say two things to Paul. One is that the Unfair Terms in Contracts Regulations, when they come in, will ensure that there is appropriate information. They are pretty wide-ranging both in their scope and their definition and they will ensure that the information that the consumer requires in the secondary ticketing market is available. That is the first thing to say. The second thing to say to him is that we as the sponsor department will be vigilant in this area, so we will see what evidence emerges and whether consumer concerns grow and whether the Internet actually really genuinely has become more of a problem in the market rather than facilitating consumers in having greater choice, and we will accordingly seek advice from OFT so there is a double lock on trying to protect the consumer. The OFT do it directly and we as their sponsor department will also keep an eye on it.

Q142 Paul Farrelly: And music fans can expect the same protection as sports fans?

Margaret Hodge: They will both be protected by the consumer protection legislation, yes. The Crown Jewels approach might lead to a difference in approach to those two events you mention.

Mr Woodward: All of this being said, my view after 14 months in this job is that what we need slightly more of is goodwill. It is no secret that I was exasperated by the conduct of eBay over BBC Radio 1's Big Weekend recently. That was an opportunity for the industry, notwithstanding the caveats that they may well have shared with you, to have responded in a slightly better way to what actually took place on the Internet. Again let us bear in mind that it was only a small number of tickets we are talking about, but there is no question that when that weekend was organised it was principally meant to be for people who lived locally to Preston. When the tickets had been paid for by licence fee payers, in other words they were free but the BBC's costs in relation to this were coming out of the licence fee, when it was made absolutely clear that they were meant to be for people locally, when the artists had given their time for free, when those tickets found their way via consumers onto eBay, I think it would have been better if eBay had shown an act of faith and actually said, "We will suspend the listings to these events". That would have shown a willingness for self-regulation to be able to work. And I do think that there is an issue that those involved in the secondary market have to wrestle with here, because it is important they understand that the Government does not want to step into this with regulation, because it may not work; it is easy to announce but to actually enforce it and make it work is very hard. The model terms and conditions undoubtedly will help but for this really to work well, whether it is with regulation or without regulation, we need the industry to understand that fairness and fair access really matters and when the BBC puts on an event paid for by licence fee payers that is free and those tickets end up going on the Internet and eBay is making money out of the listings for that, there is problem, and I think it is very important that industry recognises that some of the solution to this problem rests in the hands of the secondary ticket market, and it would be a real shame if the Governments finds itself pushed into a position where it might be forced ultimately to consider regulation when the industry has it in its own hands to resolve this.

Q143 Paul Farrelly: I share your exasperation with that example and I am sure, Shaun, you can understand the exasperation here where the Ministries and the Office of Fair Trading cannot come to this Committee and tell us the main terms of the agreement because it is going to be announced in August in all its fine detail.

Mr Woodward: To be fair on that, that is a point of process and to be really honest that would be a bit like saying you have got a select committee report coming out next Tuesday and we want you to tell us what is in it today. To be fair to the OFT here, if they have a reason to withhold confidences until August I think we had better respect that. What I think is quite legitimate though to ask about is whether or not there is a desire by the OFT to want to address that. Again, one of the things I think concerns me, and I think it an issue we would all share around this table, is that it is interesting that newspapers like the Sun or Mail or Telegraph or Times, or whatever, are picking up large volumes of complaints but at the same time they are not coming to the OFT. I think again it is perfectly legitimate for the OFT to say that of its mailbag of two million complaints a year it hardly gets any in relation to the specific area of exploitation of unauthorised sales but it may be of course that the consumer does not think of going to the OFT to register their concerns, and so it may be helpful if your Committee is able to direct the public a bit their way because I think it is in good faith by John that he is saying what he is saying but, equally, if the volume of complaints coming to the OFT were like complaints about banks and bank charges then I think it might find itself in a different position.

Q144 Adam Price: I was wondering if you think it is permissible or acceptable for promoters to insist on no resale and then introduce measures, like Glastonbury for example, with personal identification? You would not have been very happy for instance if Paul Farrelly had paid his 25 for a special conference at the weekend and then I had turned up instead because I had bought it off him. I have got better things to do at the weekend, but is it permissible for promoters to insist on no resale and then introduce measures like that and also to insist on traceability then if tickets are put up on the Internet?

Mr Woodward: Adam, I think again we have to be careful before we give a knee-jerk response to that. By instinct I cannot see any sensible reason for there not being a legitimate market for resale and it is interesting again to note in the legislation that is taking place in New York at the moment by Governor Spitzer (and that comes out of the New York Yankees case) they are repealing the legislation which outlawed the secondary market but that was because the New York Yankees wanted to be able to take more control over their own tickets. However, it is an important feature of the New York legislation that there is a market for reselling.

Margaret Hodge: I think I would put it in a slightly different way. There may well be a public interest in ensuring that there is not a transfer or resale of tickets vis--vis football games and there is a public order purpose in that. If there is a public order purpose you would take a different view and use that legislation. The real question for this Committee and the question that we are trying to address is should we use regulation around primary and secondary ticket agents to control or free up a secondary market. There may be occasions when you want to prevent the resale but you should use appropriate legislation and be clear about your purpose in so doing otherwise you want consumer choice.

Q145 Adam Price: Okay, I can understand the specific public order issue in relation to football which is about physical sale outside a ground but have you not extended that to on-line as well? Is it illegal now to sell ---?

Margaret Hodge: Consumer protection is as much on-line as elsewhere.

Q146 Adam Price: Yes, but it is illegal to resell football tickets for a profit on-line?

Margaret Hodge: Yes.

Q147 Adam Price: But there is not the same public order issue in that case so you are saying there is a legitimate case for banning the resale of tickets?

Margaret Hodge: Where it is a situation where you want to control who goes to your football game because you are concerned about a public order implication however you sell that ticket, whether it is a primary agent, a secondary agent, on-line, customer face-to-face, it would be illegal. The consumer protection legislation does not alter because the transaction takes place on-line.

Q148 Philip Davies: Rosemary, who is not here now, made a very good point earlier which is that people go and buy exclusive fancy handbags in shops and then within ten minutes flat have them up on eBay selling them at a profit. Presumably the Government and OFT do not intend to get stuck into that kind of situation so it is difficult for me to understand why tickets should be any different in terms of if somebody has bought something and they feel they can sell it on at a profit, even though they are making a fast buck, it would be any different. Would you think that by getting involved in regulating tickets you are opening up a can of worms for all kinds of other things that may legitimately follow on or would that be a deterrent for you to get involved?

Margaret Hodge: We have slightly different purposes as Departments and our approach to it is we are coming at it in a slightly different way, but I have got a lot of sympathy with that view, and again I think one would have to justify the intervention either because there is a consumer detriment, which is why I have always looked to see what we can do around transparency and openness so the consumer knows what they are getting and can make that informed judgment, or I would look at things like is there a public order or international obligation, which takes you to the Olympics issue or is it a unique event, which was the view taken about the Princess Diana concert for example, and whether or not resale was legitimate. So it is those sorts of issues, but I share a lot of your concern that if we start intervening we would be distorting the market and actually then impeding consumer freedoms and it is information that matters, it is informed choice, it is getting that transparency that is vital.

Mr Woodward: Again, Philip, there is an important distinction to be made, is there not, between you, say, buying a ticket for 100 and selling it for 125 and you organising 20 people to buy tickets at various addresses for events and then effectively making a business out of it. When the demand and supply part of the equation here is for a sporting event or a music event where there simply are nowhere enough tickets going to be available then there is a sense of unfairness that grows amongst consumers about not being able to get access to it. What the Internet undoubtedly has allowed to happen - which is both good and bad - is very fast access and if you are organised about this you could develop a revenue stream with 100 people applying for these tickets, and that is where we are picking up in our focus group work at the DCMS the distinction that the public are making here in the secondary market. They are making a very clear one, they are saying "Me as the consumer, me that can't go, me that has a ticket that just wants to sell it on for a bit more," that should be fine, but where it is clearly an organised, unauthorised secondary market, they think that is unfair. Interestingly where again opinion divides is not actually saying the Government should act. A recent BBC poll, a big poll of 3,000 people, actually put forward the idea in relation to a music event that they want the music industry to take a bigger role in this. The thing about technology now and you saw it with Glastonbury and you saw recently with an Arctic Monkeys concert, is those putting on these events, the promoters, do have an opportunity now to check these things out. They can make sure that the person who applies for the ticket is the person who comes but here again we come back to the whole problem with eBay and that BBC Weekend recently because again the BBC were insisting there should be ID checks at the event so that if you apply for the ticket you were the person that came. The consequence of eBay persisting after we asked them voluntarily to no longer carry the listing was that, I am told, that the BBC then had to abandon their security checks because some people were even offering on the listing on eBay alternative IDs, let us put it that way, as a way of getting into the event. I do think again it comes back to a moment whereby even if it is a tiny minority of tickets we are talking about there is an onus on the responsible part of the secondary market here, regardless of whether there is legislation, to say "This is not right we should not be doing it."

Q149 Chairman: Surely the OFT are suggesting that the attempts by promoters to prevent tickets being sold to other people may be in breach of the current regulations?

Mr Fingleton: Our view is that a pure restriction on the consumer's right to resell would contravene existing consumer protection law. However, that needs to be looked at in the context of a) how it is communicated to consumers so is it spelt out very clearly that there is no reselling and b) is there a right of refund, so if the consumer can get a refund. That makes a big difference because it is about where the risk is borne. Risk cannot be a one-way street for the consumer, so if you are going to say you cannot resell in the event that you cannot go to the event and you cannot get a refund either, that is putting too much risk on the consumer and therefore is incorrect, and we also look at the actual scope of the prohibition and how wide it was.

Q150 Chairman: So was Glastonbury in breach of regulations?

Mr Fingleton: I am not going to pronounce on the specific legality but I think Glastonbury did have a refund up until a period before and I think the court will take account of those factors and might very well find that Glastonbury was not in breach but if it had not had a refund might find that it would have been in breach. I think the refund is a critical part of that. What has never been tested in whether - and other places like the Barbican do this as well that if you hand your tickets in up to three days beforehand you get a voucher - courts have never pronounced on whether that is an equivalent treatment of the customers to allowing them to resell. Of course the problem then becomes at what stage the final consumer becomes a business, because if you as a final consumer purchase the ticket with the genuine intention of going to the event and then find out that you cannot, of course you should either have a refund or be able to resell. If, on the other hand, you purchase with the full intention of saying, "I am going to get in there fast and make a profit," you look a little bit more like a business, and if you do that for quite a lot of tickets and you are making quite a lot of money out of it you look much more like a business. How you draw the fine line between consumers acting as consumers and consumers becoming secondary agents will be a challenge if these cases ever get to court.

Q151 Philip Davies: I know Shaun does not always appreciate me giving my experience from Asda, but when I worked for Asda we challenged something called the Net Book Agreement where publishers insisted that books could only be resold on at a particular price, and we challenged that in the courts and won, and the Net Book Agreement collapsed, and now people can sell books at any price they want to sell them, and that seems to have given a whole lot of benefit to customers and more access to more people as far as I can see. Would it not be quite extraordinary if following many years on from the Net Book Agreement decision which prevented conditions like that being imposed that we actually went back to a system where we were allowing ticket sellers to make such restrictions on what price they could be sold on in future or anything like that, would that not be seen as a retrograde step?

Mr Fingleton: On the Net Book Agreement the evidence is that the number of titles went up and prices went down when that particular regulation was introduced so it was a regulation that was stifling the market. I think banning secondary sales in the market generally would harm the market because it would mean that demand and supply did not match as well as they might. It would mean I think that consumers would be less willing to pay upfront for events in uncertain circumstances and consequently it might dampen demand for the industry, and so it is our very clear view that this type of regulation, and I think it has been put very nicely that 90% of the market works very well and trying to regulate ay for the other 10% would be extremely difficult. There are a lot of practical difficulties with enforcement, with compliance, with European competition law, because there is a question mark over whether that would be the case, and I think also with the evidence we get from consumers that the primary issue they are interested in is enforcement of existing law vis--vis secondary agents who are misleading consumers when they sell tickets on. That would be our primary focus going forward. One other point I should have mentioned earlier, anticipating the Unfair Commercial Practices Directive which comes into force next April, anticipating that and the work that we are doing with the industry and making sure that the industry will be future-compliant as well as past-compliant.

Q152 Mr Sanders: Why is an Olympics athletics fan deserving of more protection than a Charlton Athletic fan?

Margaret Hodge: It is an international obligation.

Q153 Mr Sanders: Why?

Mr Woodward: If we want to hold the Olympics we actually have to agree to do it, so maybe we do not want to hold the Olympics but I think it is a good idea to hold them. The other thing you have got to bear in mind, Adrian, here is putting on these events costs quite a lot of money and again ---

Q154 Mr Sanders: But surely that is true for everybody?

Mr Woodward: Forgive me, I am trying to answer your question. Let me answer the first question. When we are looking at the Crown Jewels events now, what we are looking at is a recognition that we do not think the Government should be trying to control these events. What we are trying to prevent are incidents taking place which abuse the market. It is terribly important to be proportionate about this. 90% of it works well. There is no huge consumer demand for outlawing a secondary market; in fact quite the contrary. What there is is very strong consumer demand to stop those who are making excessive amounts of money out of unauthorised sales in the secondary market, and I think to start regulating every single sporting event that took place along these lines would be an example, I am afraid, of over-regulation. Certainly this Labour Government, and I think the Conservative Party too, share this view; we want less bureaucracy and less regulation not more. I do not believe that stepping in and over-regulating and producing a whole bureaucracy which would have to be administered is the way forward. Maybe you have in mind, Adrian, a programme for how you would administer this without effectively passing on huge extra costs to the clubs which, after all, are not always finding it particularly easy. It may be that you can tell me that the two clubs that you have just cited are demanding that we do this but we are not picking up a demand that we do it. There are certain Crown Jewels events of national significance where access is a key issue where there undoubtedly is concern by the consumer that we should move on this front, so keeping it proportionate, trying to get self-regulation to work where we can has to remain, I think, the sensible way forward. Further bureaucracy and regulation is not desirable. However, in extremis if these excesses continue of course ultimately it will have to be one way that we consider moving forward.

Q155 Mr Sanders: So what are the fears about the Olympics Games that it requires this added protection?

Margaret Hodge: I am a little bit puzzled by where you are coming from. Are you suggesting that the state should regulate the sale of tickets?

Q156 Mr Sanders: I am suggesting why is it that there is this extra protection for the sale of tickets for people to go to the Olympic Games that does not exist for a consumer of another type of ticket to a concert or another sporting event?

Margaret Hodge: Let me ask you the question ---

Q157 Mr Sanders: You are here to answer the questions, not me.

Margaret Hodge: The question, with the greatest respect to you, is a bit of an odd question. I do not know whether you are suggesting one of two things, either Lib Deb big state ---

Q158 Mr Sanders: Do not make it party political, we are here talking about consumers.

Margaret Hodge: I am wondering whether the Liberal Democratic Party is now promoting the idea of big state intervention to protect the individual. The second thing I was going to ask you was whether you were suggesting that on the grounds of this specific condition that was laid down by the Olympic authorities that we should have said no to hosting the Olympic Games here in Great Britain?

Q159 Mr Sanders: There must have been a good reason for that specific condition; it was to protect consumers, so why do you not extend that protection to consumers for other events?

Margaret Hodge: Because we think it is much better for consumers to have choice in the market and that is why I am somewhat astounded by the direction of your questioning. And what we need to do is ensure that they get the appropriate and full information and transparency so that they can make an informed choice and that there should not be a mechanism imposed by the state which would restrict their choice on the basis of a false definition of consumer protection.

Chairman: A final question from Paul Farrelly.

Q160 Paul Farrelly: It is a question to Mr Fingleton again. I take it from Margaret's and Shaun's answers that the answer to the previous question is that the protection for the Olympics is a bit over the top and not necessarily that worthwhile but we had to go along with it?

Mr Woodward: No it is not, and that is absolute nonsense, Paul, and it would be a travesty to suggest that is what I thought. The whole debate about the Olympics and access to the Olympics was actually had when we were pushing the legislation through, if you remember, and it also brought up the question of why that should not be extended to other sporting events. The fact of the matter is that demand for tickets for Olympic events is going to be absolutely huge. One of the reasons the Olympic Committee have it there as something that if you want to hold the Olympics you have to do is that it is absolutely ripe for gross exploitation by a secondary market, and therefore to ensure fair access both to the Member State that may be holding the event but also to the international stage and people who will want to come to come to it, you do need very, very careful control of the tickets. It also relates to the control of the brand as well. That does not, by and large, apply to most sporting football matches. There is not demand of that kind of order. It is a perfectly legitimate debate to have but to confuse a Premier League football match, say, with the Olympics for 2012 and the opportunities for organised, unauthorised selling on a massive scale and exploitation of the brand which could well bring the Olympics themselves into major disrepute has to be understood as being quite different.

Q161 Paul Farrelly: Just as a final comment, I am not confusing anything at all. I look forward to the Rugby World Cup some of the matches of which will be played in Wales or Scotland for which there will be a great demand because it is a prestige event.

Mr Woodward: There will be but I think it is important to understand that the Olympic brand and the Olympics themselves, when you have got six years for organised, unauthorised selling to take place on an absolutely major international scale, I think the Olympic Committee is absolutely right to impose those conditions, and I do not think it necessarily follows that because it is done for the Olympics that it ought to be done for all major sporting fixtures as well because ironically we could up end up in a position which does not actually help the 90% of consumers of football or rugby matches for whom there is no evidence there is a problem, and we could seriously damage that market, and I do not think anybody in this Committee or indeed in Government or any political party wants to do that. We are all trying to improve the situation.

Q162 Paul Farrelly: Okay, Shaun, you have had the last word on that. Mr Fingleton, can you understand dissatisfaction in the industry and here, just picking up on your previous answer to me, because in some instances you make great play that you will pick out cases and litigate for consumer protection but in certain circumstances where there is a lack of clarity you say "Let the courts decide" and do not actually get involved be it in this industry or with the example that I used previously in the banking industry where judges are screaming for a test case to be heard and taken up?

Mr Fingleton: Is this a question about banking or about this?

Q163 Paul Farrelly: It is about your prevarication.

Mr Fingleton: I do not think we are prevaricating. We bring court cases in many instances. We work in other cases to get the voluntary agreement of the industry and we use other instruments like market studies where we believe they best serve the consumers' interests. Overall the OFT represents consumer interests based on the evidence that we have before us to the best of our ability and we have to prioritise the enforcement actions we bring in that context.

Q164 Paul Farrelly: Its record in my experience over many years has not been effective and that is shared outside.

Mr Fingleton: I beg to differ, I think we produce really excellent results for consumers across a whole range of areas.

Chairman: This has gone on slightly longer than we intended but it has been very helpful. Thank you very much.