Conclusions and recommendations
1. It
is important to bear in mind that the term "touting"
has very different meanings to different people, when considering
claims that "touting" causes problems and that there
is a need for intervention to control it.
(Paragraph 13)
2. It
is clear, however, that the rise of the internet has increased
the opportunity for secondary sales of tickets—by individuals,
organised rings and IT experts—beyond the sometimes offensive
antics of "touts" immediately outside stadiums. The
question for legislators and policymakers, however, is to define
the extent to which this has become a "problem", why
it is so—generally or on a case by case basis—and
whether legislation is a proportionate response. They must bear
in mind, too, the extent to which legislation will be enforceable,
and at what cost, and whether it may have unintended consequences.
(Paragraph 13)
3. The
surveys of consumer opinion which have so far been carried out
do little more than confirm that consumer attitudes are mixed.
One element which is missing is whether consumers would give the
same answers if they had been informed of the concerns expressed
by organisers about the possible long term effects of touting
on the industry. Further
research would be helpful. (Paragraph 30)
4. We
accept that the organisers' desire for the secondary market to
be curbed is largely motivated by concern for the long term well-being
of the industries in which they operate, and that this is something
beyond merely protecting their own commercial interests which,
in the short term, they could do simply by raising their prices,
so that there was no profit to be made by touting.
(Paragraph 31)
5. As
mentioned, there has been particular public criticism of the selling
of tickets which were issued free, for charitable events; and
we have no hesitation in condemning this practice. However, in
principle, we see no difference between the selling on of tickets
which have been provided free (whether to a wholly free event
or as a complimentary ticket) and the selling on for profit of
tickets which have been priced low to enable particular groups
to attend, or which have been allocated to particular groups such
as wheelchair users. In both cases the resale undermines the objectives
of the organisers who, in both cases, have intentionally supplied
the consumer with something worth more than any money which has
been paid. However,
the onus is on promoters to ensure that such tickets can be distinguished
so that sellers, buyers and exchanges are aware of the basis on
which they were originally available. (Paragraph
35)
6. More
work needs to be done on quantifying the core problem. In particular
more reliable estimates are needed of the proportion of tickets
passing through the secondary market: overall;
for
different kinds of events; at,
above or below face value; via
organised operations or incidental sales;
through
auction sites, trading platforms, secondary agents or other routes.
We
would encourage secondary ticket sellers and marketplaces to co-operate
fully in making this data available. (Paragraph
39)
7. While
we consider that it would be unwise to assume that problems caused
by ticket touting are necessarily the same worldwide, or that
measures used to ameliorate the problems in one country would
necessarily be effective in another, there may be lessons to be
learned. The different trends now observed in different parts
of the United States and Australia strongly suggest that legislatures
there are seeking to contend with problems whose nature depends
on how touting and national attitudes to it have developed over
the years in those countries. We recommend that DCMS, with the
assistance of the industry, should undertake a comparative analysis
of what problems have arisen in other countries, including other
European countries, what measures (if any) have been introduced
to deal with them, and whether such measures have been regarded
as successful in tackling the problems they were intended to address.
(Paragraph 46)
8. 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. (Paragraph
58)
9. 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.
(Paragraph 59)
10. 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. (Paragraph 60)
11. 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.
(Paragraph 67)
12. 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. (Paragraph 68)
13. We
do not underestimate the difficulty of eradicating abuses of the
market without imposing unnecessary fetters on areas of the market
which cause no problems. As we have observed, there is no consensus
as to what proportion of the market is problematic: the case for
intervention would be strengthened if it were demonstrated that
there were real problems affecting more than a small minority
of events. (Paragraph 76)
14. We
also believe that more can be, and should be done, to seek a voluntary
solution. Since it is the secondary market which gives rise to
the industries' concerns, and regulation of that market (voluntary
or otherwise) which is sought, it is not realistic to expect
to find solutions in a forum where that market is virtually unrepresented.
So long as one contingent seeks the effective abolition of the
other, which is therefore fighting for its very survival, hopes
of agreement must be forlorn. (Paragraph
77)
15. We
agree with DCMS that regulatory intervention should be considered
only as a very last resort. While intervention was justified on
grounds of public order and safety at and around football matches,
and may be an international requirement for hosting some major
sporting events, we have reservations about the criminal law being
used as a way of supporting organisers' efforts to select the
audiences for their events, essentially as an aid to their self-policing
of touting. We are also concerned by the real risk that a convenient
market, which some consumers have grown accustomed to use and
trust, would be driven underground, to the detriment of consumers
and stakeholders. We appreciate, however, that international pressures
may make it necessary for existing legislation to be extended
as a condition of the UK being eligible to host major international
sporting events, but we are not persuaded that it would be right
to legislate more widely at this stage. (Paragraph
78)
16. While
we appreciate that the concept of "Crown Jewel" events
is viewed as a possible interim measure, rather than as a long
term solution, we are not optimistic that this approach would
do more than exacerbate the confusion inherent in the existing
two-tier system. In the absence of a voluntary code, it is understandable
that pressure will continue to extend special protection to the
'Crown Jewel' sporting events and many popular music events. We
urge eBay and other operators in the secondary market to follow
the lead of those marketplaces which already refuse to list tickets
for free events or tickets which have been allocated for specific
groups, such as children, the disabled or amateur sports clubs.
There is no arguable justification for profiteering from these.
(Paragraph 79)
17. It
is encouraging to see a move towards constructive dialogue between
creators and secondary marketeers and we urge all the interested
parties to join in this debate. It could provide the seed for
the co-operation which has so far been lacking between the stakeholders.
As presented, the proposal may be no more than a different machinery
whereby those responsible for providing events would be able to
share in profits which can now be made in the secondary market.
But it does introduce new potential for a recognition of the legitimacy
of the secondary market by the entertainment and sports industries,
alongside an acknowledgment of their moral right to share in profits
made by others out of the events for which they are responsible
and in which they have invested talent, funding and organisation.
At the same time it provides scope for the acknowledged benefits
of the secondary market to the consumer to be preserved and developed,
with added protection for consumers and a real incentive for effective
self-regulation throughout the ticketing industry. For example,
tickets could be sold subject to terms and conditions which provided
that resale through an approved secondary marketplace was permitted
(with an agreed levy passing back to the industry through a collecting
agency), so that consumers could be given more information about
the tickets being offered for sale, without any risk of finding
that tickets have been cancelled because they have been sold on.
Approval would be dependent on an agreed code of practice covering
consumer protection measures as well as arrangements for collecting
levies. A great deal of work needs to be done on the detail of
how such a scheme might operate but, at the least, this initiative
could lead to joint engagement towards a solution in which the
convenience of the secondary market could continue while at the
same time supporting the industries on which it relies. We commend
it and strongly encourage all those involved to consider it seriously.
(Paragraph 81)
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