Select Committee on Culture, Media and Sport Second Report

What the industries have done to tackle touting

47. In evidence to this inquiry, promoters and primary agents described a number of measures which they had introduced, and which were designed either to reduce the demand for unauthorised selling by improving their own services, or otherwise to prevent tickets going on to the secondary market . These included:

—  keeping some tickets back, for sale closer to the day of the event;[149]

—  distributing tickets as close to the event as possible to reduce the opportunity for fraudulent tickets to enter the market;[150]

—  adding extra days (or events) to satisfy increased demand for tickets;[151]

—   limiting the number of tickets sold to each purchaser or credit card or address;[152]

—  blocking multiple applications and automated bookings,[153]

—  blocking sales to known touts;[154]

—  making tickets available only to club members;[155]

—  improving the resale and exchange services available to consumers unable to attend events for which they have bought tickets;[156]

—  "shop-a-tout" hotlines and ticket tout complaint lines;[157]

—  selling tickets subject to terms and conditions restricting transferability, often backed by provisions for cancellation of tickets in the event of breach;[158]

—  working up model terms and conditions of sale to be adopted throughout the primary market;[159]

—  enforcing terms and conditions by various means which include turnstile checks, monitoring internet auction sites, tracking down and cancelling touted tickets, refusing entry to holders of cancelled tickets or ejecting them from venues, and injunctions;[160]

—  using advanced technology for enforcement, including electronic 'smart cards' which act as season tickets, e-tickets which have to be redeemed at the entry point for the event with ID checks and booking references, issuing tickets with the holder's photograph, and bar-coding tickets.[161]

48. Promoters told us that these measures, and keeping one step ahead, took up a huge amount of resources, as well as raising concern that the measures designed to combat touting could also inconvenience and even alienate customers.[162] For example, Mr Geoff Ellis the Chief Executive of DF Concerts, which promotes Scotland's "T in the Park" music festival, told us that the policy of limiting tickets to two per person led to complaints from families because the limitation would prevent them from attending, but that increasing the limit to four would play into the hands of touts.[163] Moreover, some witnesses told us that introducing checks using barcodes and ID, as for the BBC's Big Weekend, would make it increasingly difficult to purchase tickets for friends and family as presents,[164] and had even encouraged touts to offer what Mr Woodward euphemistically described as "alternative ID" so that the BBC had had to abandon its security checks.[165]

49. It is an inherent feature of many of these measures that they will inconvenience one sector of the public, namely those to whom tickets have been resold before being cancelled, so that they will be refused entry and may have no redress, even though they may have bought the tickets in good faith. The Football Association told us that there had been criticism that measures such as cancelling tickets amounted to targeting innocent victims, but that enforcing the conditions was an important part of the fight to stamp out the black market, so that people would learn not to buy from touts and thereby cut off the demand for touts' services.[166]

50. We held our single oral evidence session just after the end of the 2007 Glastonbury festival, for which a new application procedure had been introduced, requiring applicants to pre-register in order to purchase tickets, and to upload photographs of themselves which were then printed on their tickets.[167] We heard that the procedure appeared to have been successful and been welcomed by members of the public, although the media have reported that the organiser intends to reserve 40% of next year's tickets for telephone sales because this year's system had favoured older people, with the money for fast internet connections, and the numbers of teenagers had been down.[168] There was recognition that the range of events for which such measures could be appropriate was limited, not least because of the time taken to set it up.[169] We also heard that that there was some doubt as to whether the prohibition on resale of Glastonbury tickets contravened existing consumer protection law.[170]

Terms and conditions of sale

51. It is apparent that many of the measures likely to be the most effective in preventing unauthorised secondary sales build upon terms and conditions restricting the transferability of tickets, so that much of the promoters' strategy hinges on the enforceability of those restrictions. This raises two important issues, firstly whether those terms and conditions are enforceable as a matter of law, and secondly the extent to which they are enforceable in practice, given the changed face of the secondary market, with many consumers selling tickets to each other via the Internet.

The legal position

52. For the purposes of the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), a contractual term is unfair (and unenforceable) if "contrary to the requirement of good faith it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers." The OFT has said that it is possible to argue under the UTTCRs that it is unfair to restrict consumers from reselling tickets for profit unless fair mechanisms are provided where consumers can dispose of a ticket they can no longer use, although it is for a court to decide and ultimately determine what terms and conditions are fair or unfair.[171]

53. The Society of Ticket Agents and Retailers (STAR) told us that in January 2005 the OFT had invited STAR to draw up model terms and conditions for use by its members, and that work with interested bodies has been proceeding with a view to seeking approval under the OFT's Consumer Code Approval Scheme, but that one outstanding issue concerned the draft condition precluding ticket holders from reselling tickets without the authority of the event organiser. Mr John Fingleton, Chief Executive of the OFT, told us that agreement with STAR was expected soon, and that although he could not give advance details of the agreement, the primary focus would be around what restrictions could be put on the resale by consumers of tickets and linking that to whether refunds were available.[172] He said that venues such as the Barbican offered vouchers to customers who handed back tickets up to three days before an event, but that the courts had never pronounced on whether that would be regarded as equivalent to allowing resale. He also indicated that individuals who bought tickets with the intention of profiting by resale might not qualify for consumer protection, and that drawing the fine line between "consumers acting as consumers" and "consumers becoming secondary agents" would be a challenge if the cases ever got to court.[173]

54. The Government told us that "some agents do not provide refunds once the ticket is sold in the same way as goods can be returned to a shop".[174]Although witnesses from the entertainment sector told us that they were generally happy for people who could not attend events to sell on their tickets at face value, and that they were endeavouring to provide improved resale and exchange facilities for those consumers, they were adamant that they could not offer a blanket refund policy at present.[175] In this context it is necessary to distinguish between the different kinds of services offered for customers' returns. The Wimbledon Championships (for which demand far exceeds supply) are a rare example of the organisers guaranteeing a full refund, up to the eve of the day to which the ticket applies,[176] but more commonly organisers will refund the price paid only after they have resold a returned ticket. The Society of Ticket Agents and Retailers told us that many venues and event organisers claimed that they already offered to help customers who found themselves in a real predicament but that they were concerned about publicising the service.[177] Mr Rob Ballantine of the Concert Promoters Association said that, although it was not openly said, traditionally refunds had been given to fans who returned their tickets "for genuine reasons", especially if the event was a sell out so that the tickets could be resold straight away.[178]

55. The Association and the Society of Ticket Agents and Retailers, among others, gave reasons why blanket refund policies would not be possible. One was that such a policy would underwrite the secondary market, resulting in touts purchasing as many tickets as they could, knowing that any they could not sell could be returned to the promoter for a refund.[179] Another was that events were built on ticket sales, with unacceptable risks of financial collapse in the event of tickets flooding back at the last minute from consumers who had changed their minds after seeing bad reviews or discouraging weather forecasts.[180] They said that they were, however, committed to the further introduction of ticket resale mechanisms where fans could sell tickets at the price they originally paid, but that the service could only be extended once legislation was introduced to ensure that it was not abused by touts.

56. The ticket resale mechanisms which were described to us allowed resale at face value,[181] and appeared to be available only once all tickets for an event have been sold.[182] WeGotTickets told us that no organiser was going to be happy for customers to return unwanted tickets for events which were still on sale.[183] eBay commented that such a service was a long way short of a guaranteed refund and that, even if the ticket was sold, the consumer would not recover the full outlay as there would be a 10% charge for the service.[184]

57. Unsurprisingly, witnesses involved in the secondary market took the view that terms and conditions restricting resale of tickets were indeed unfair to consumers and therefore unenforceable.[185] The Government drew our attention to a recent test case instigated by eBay under Australian legislation, where a condition on an event ticket provided that, should it be re-sold for profit, it would be cancelled and the holder would be refused entry. The court held that the condition conveyed a message that the promoter was legally entitled to and would detect and cancel any ticket resold for profit, but as it was impossible for the promoter to detect, cancel and refuse entry for every ticket resold for a profit, this made the condition misleading.[186] Mr Alasdair McGowan, Head of Public Affairs at eBay UK. told us that, in that instance, eBay had wanted to "stand up for the consumer", and "vigorously defended the rights of people to resell their tickets" because it believed in the secondary market.[187]

58. We accept that a blanket refund policy may not be a realistic option for organisers. Apart from the likelihood that it would encourage touts to buy up swathes of tickets safe in the knowledge that they could get their money back on any not sold for profit, it would carry an unacceptable commercial risk: in this context, tickets are not like durable goods which can be returned unused to a shop for resale, not least because they become valueless once the event has taken place.

59. Quite apart from any question of whether promoters' returns mechanisms are adequate to balance and make conditions restricting resale fair and enforceable, it seems to us highly improbable that consumers who are simply seeking to avoid making a loss on tickets which they are unable to use would find the returns services on offer from the primary market to be a satisfactory alternative to what the secondary market offers. Services offering less than full reimbursement and then, only for sold out events—so that the primary market can only profit and never lose by providing the service—would be less attractive, and of little real benefit to those consumers. The primary market must do more to help the "genuine" supporters who cannot attend for "genuine reasons" to mitigate their losses. As well as providing more authorised resale mechanisms, refunds should be more openly available to those supporters, who should not be penalised by a blanket refusal to give refunds put in place to protect the market for touting. More widespread use of schemes offering vouchers could offer a constructive way forward, with the potential to give full satisfaction to the consumer with less encouragement for tout abuse than cash refunds.

60. We look forward to learning the outcome of the negotiations between the Office of Fair Trading and the Society of Ticket Agents and Retailers (STAR) on model terms and conditions for use by STAR members. We are disappointed that they have still not been announced and we urge the OFT to explain the reasons for the delay. However, it seems to us wholly unsatisfactory that there should continue to be uncertainty as to whether standard terms and conditions restricting resale, which underpin organisers' strategies against touting, would be enforceable against consumers who sell in breach of them. We observe that eBay, which says that it should not be asked to take sides in contractual disputes about terms and conditions between organisers and consumers, nevertheless saw fit to launch a test case to "stand up for the consumer" in Australia. We find it surprising that none of the stakeholders has apparently been motivated to test standard terms and conditions in this country and we recommend that they should consider the option of litigating so that the uncertainty may be resolved. We note in this respect that, shortly after giving evidence to the Committee, the Office of Fair Trading launched a court case to test the legality of bank overdraft charges. We would encourage it to make it clear that, failing voluntary agreement within the industry, it is prepared to do so over terms and conditions of secondary ticket sales and to set a clear deadline in public by which it is prepared to do so.

Enforceability of terms and conditions in practice

61. Whether or not such conditions are legally enforceable, the evidence indicated that sales were booming on the secondary market often on the assumption that they are not enforceable, not justifiable, and are even irrelevant. VisitBritain said that where resale or transference was explicitly prohibited, "consumers should respect that",[188] but it is patent that they do not. Providers of on-line market-places took the view that the terms were unenforceable because they were unfair but that, in any event, resolution of disputes relating to contractual terms was not their responsibility, although eBay told us that it did draw its users' attention to the fact that terms and conditions are often applied to event tickets.[189]

62. Promoters told us that practical difficulties in the way of enforcement included that auction sites and ticketing shops allowed people to "hide the ticket details", and "turn a blind eye to sales being in contravention of tickets' terms and conditions".[190] This was a fundamental issue dividing the stakeholders. If the ticket details are disclosed, then the issuer can enforce the condition prohibiting unauthorised resale simply by cancelling the ticket without giving a refund, and can sell again to another consumer.[191] While traders are statutorily obliged to inform buyers of the location of the seat, consumers selling tickets on are not.[192] The Concert Promoters Association told us that eBay had declined its request to provide, on their site listings, all ticketing details including block, row and seat number and the terms and conditions that "make it an offence for the ticket to be transferred", which demonstrated that eBay was "deliberately and knowingly in alliance with the touts".[193] Mr McGowan, Head of Public Affairs at eBay, said that cancelling tickets in this way would undermine the whole notion of the secondary market.[194]

63. We have made recommendations about possible litigation above. We accept that, in the absence of refunds or authorised resale mechanisms, secondary sellers may provide—for better, or worse—the only avenue by which people may sell unwanted tickets, for whatever reason. During the course of our inquiry, however, we have found evidence of distasteful practice by secondary sellers, some of which runs counter to the evidence which they have given. Among the examples are the initial refusal by eBay to remove from sale tickets from the recent Concert for Diana, for which tickets were allocated free of charge and for charitable purposes.[195] Subsequent to our evidence session, music promoter Harvey Goldsmith also provided evidence that eBay had also refused to remove offers of tickets for a charitable concert featuring Led Zeppelin, which he alleged were "false and misleading".[196] This hardly suggests that eBay is just "standing up" for the consumer; an alternative interpretation is that eBay is not just a "market place" but a frontline player concerned, for example with the litigation in Australia, with protecting its commercial interests.

64. In the sporting arena, we have also seen evidence that secondary agents such as Seatwave and viagogo have advertised tickets that were not yet on sale—so-called "futures tickets". In June this year, for instance, Seatwave and viagogo advertised tickets for the Rugby Union 2008 Six Nations Championship which had not yet been designed or printed, let alone released for sale, according to internet "screen grabs" shown to us by Ticketmaster.[197] This advertising of so-called "futures tickets" was contrary to the evidence Mr Cohen, certainly, of Seatwave, gave to the Committee, that they were not selling "futures tickets" which had not yet gone on sale.[198] In oral evidence, Mr Burns, the chairman of ASTA, referred to another secondary internet ticket agent, Get Me In, its listing of tickets for the Concert for Diana and its commitment to donate all proceeds from those ticket sales to charity.[199] In June 2007, however, just as tickets were advertised for sale officially for the Rugby Union Heineken Cup Final in May 2008, Get Me In was showing these tickets for sale on the wrong day and at the wrong stadium (Saturday 24th May at Twickenham)—and for the right day at the wrong stadium (Sunday 25th May at Twickenham again, rather than correctly at the Millennium Stadium in Cardiff).

65. One of the issues with which the Committee was concerned in conducting this inquiry now was the extent to which the expansion of internet use enabled sophisticated applicants to gather tickets—and the offer them for resale at much higher prices immediately—on a greater, more systematic scale than the traditional activities of touts outside stadiums. In the evidence we have seen, there is clearly no reliable publicly available data on this. Mr Nick Blackburn, Managing Director of Seetickets, believed that 30-35% of tickets are snapped up by people who simply want to re-sell them and the rise of the internet has spurred on what are "clearly colloquially known as bedroom touts".[200] Mr Paul Vaughan, Operations Director at the Rugby Football Union, estimated that "about 60%-odd" of resellers offered only one or two tickets and "30-40%" offered "multiple tickets".[201]

66. Clearly, in an unregulated free market, we appreciate the difficulty of gaining reliable statistics. When asked by the Concert Promoters Association to open its books, for instance, to show whether it was collaborating with known ticket touts, we were told that eBay had refused, citing data protection legislation and its own privacy policy and privacy agreements with users.[202] In oral evidence, when pressed, both Seatwave and viagogo denied "collaborating" with organised touts or re-sellers, stating that—like eBay—they were marketplaces only.[203] We heard, however, that a feature of the industry was so-called "limited user agreements", by which everyone who sells via the sites had to provide them with a guarantee that they will deliver.[204] It is through this mechanism, clearly, that they are then able to offer buyers using their own guarantees in respect of refunds.

67. In the absence of clarity over the legality of restrictive terms and conditions of re-sale, and widespread availability of guaranteed refunds or official exchange mechanisms by promoters and primary sellers, we commend sites such as Seatwave and viagogo on their development of mechanisms to protect purchasers using their own sites. We believe clearly, however, that it is in their own commercial interests to do so. From the evidence we have seen, including the availability of "futures tickets" (advertising their own ability to lay hands on tickets), we can only conclude that such sites do collaborate with sophisticated buying operations. Despite subsequent denials, indeed, when pressed on this issue Mr Cohen of Seatwave remarked: "I do not know how you would describe 'collaborating'. If the marketplace works well and people want to sell tickets, I guess you could accuse us of that".[205] As long as secondary sellers continue to indulge in dubious or suspect practices, there will inevitably be calls for legislation and we would encourage them to clean up their act by, at the very least, not advertising tickets which cannot possibly be in their or their customers' possession at the time.

68. We would also welcome an across the board commitment not to list tickets distributed free of charge, for example for charity events, to particular attendees, such as children or the disabled. In the interests of consumer confidence and safety, too, we would like to see secondary marketplaces require sellers to provide more information about ticket details including, ideally, face value, block, row and seat numbers. However, we recognise that this is only practical if the event organisers do not simply cancel all tickets advertised for sale in the secondary market.

149   All England Lawn Tennis Club Ev 8, Mr Geoff Ellis, Chief Executive of DF Concerts, Q 30 Back

150   Ticketmaster Ev 31 Back

151   Jockey Club Racecourses Ev 93 Back

152   Football Association, normally four tickets for England matches, Ev 6, Mr Geoff Ellis, DF Concerts, two per person, Q 45, Ticketmaster, one credit card per address, Ev 31, Society of Ticket Agents and Retailers Ev 36  Back

153   Ticketmaster Ev 31, Mr Nick Blackburn, Managing Director of See Tickets Q 54, Five Sports Ev 108 Back

154   Society of Ticket Agents and Retailers Ev 37 Back

155   Football Association Ev 5 Back

156   Ticketmaster Ev 31, Society of Ticket Agents and Retailers Ev 34 Back

157   Five Sports Ev 108 Back

158   Ticketmaster Ev 30 Back

159   Society of Ticket Agents and Retailers Ev 32 Back

160   Rugby Football Union Ev 2, Football Association Ev 5, Ticketmaster Ev 31, STAR Ev 37, VisitBritain Ev 99, Five Sports Ev 108, Mr Nick Bitel, Q21, Mr Geoff Ellis, Q 45  Back

161   Mr Geoff Ellis, Q 45, Ticketmaster Ev 31, Football Association Ev 6, WeGotTickets Ev 103, Concert Promoters Association Ev 19, STAR Ev 37 Back

162   Concert Promoters Association Ev 19, Society of Ticket Agents and Retailers Ev 37, See also Mean Fiddler Music Group Ev 115 Back

163   Q 45 Back

164   STAR Ev 37, Mean Fiddler Music Group Ev 114 Back

165   Mr Woodward Q 148, Concert Promoters Association Ev 19 Back

166   FA Ev 6 Back

167   STAR Ev 37 Back

168   "Middle-class, middle-aged Glastonbury plans new system to woo younger fans" 13 July 2007, The Guardian Back

169   Society of Ticket Agents and Retailers Ev 37, Mr Nick Blackburn, Managing Director of See, Q 58, DCMS/DTI Ev 76 Back

170   Mr Nicholas Bitel, solicitor representative of the All England Lawn Tennis Club, Q 15, Mr John Fingleton, Chief Executive of the Office of Fair Trading, Q 150 Back

171   DCMS/DTI Ev 75 Back

172   Q 137. At the time that this Report was finalised, agreement had not been reached Back

173   Q 150 Back

174   Ev 75 Back

175   Concert Promoters Association Ev 18 Back

176   All England Lawn Tennis Club Ev 8 Back

177   STAR Ev 34 Back

178   Q 39 Back

179  Concert Promoters Association Ev 18, Mr Ballantine Q 29 Back

180   STAR Ev 34, Mr Ballantine Q 34  Back

181   Ticketmaster Ev 31, WeGotTickets Ev 102 Back

182   Mr Rob Ballantine, Chairman of the Concert Promoters Association, Qq 35, 36 Back

183   Ev 102 Back

184   eBay Ev 46 Back

185   eBay Ev 46, viagogo Ev 52, Association of Secondary Ticket Agents Ev 56, Seatwave Ev 59 Back

186   Ev 75 Back

187   Qq 118, 119 Back

188   Ev 99 Back

189   eBay Ev 46, viagogo Ev 51, Seatwave Ev 59, Mr Eric Baker, Chief Executive of viagogo, Q 81, Mr Joe Cohen, Chief Executive of Seatwave, Q 83 Back

190   Concert Promoters Association Ev 19 Back

191   Mr Ellis Q 45, Ticketmaster Ev 31, Mr McGowan Q 106, VisitBritain Ev 99, Five Sports Ev 108, England and Wales Cricket Board Ev 117 Back

192   Price Indications (Resale of Tickets) Regulations 1994 Back

193   Ev 20 Back

194   Q 106 Back

195   Ev 113; see also Ev 71 Back

196   Ev 136 Back

197   See for instance Q 11 Back

198   Q 86 Back

199   Q 88 Back

200   Q 70 Back

201   Q 20 Back

202   Q 106 Back

203   QQ 113 and 114 Back

204   See QQ 85 and 86 Back

205   Q 112 Back

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