Digital Economy Bill

Written evidence submitted by StubHub (DEB 72)

Submission to the Digital Economy Bill Committee

Re: Amendment NC13

Dear Mr Gary Street MP and Mr Graham Stringer MP,

Please find below a submission to the Committee from StubHub, a secondary ticket marketplace owned by eBay.

StubHub is pleased to respond to the Bill Committee’s request for written evidence. We will limit our submission to the proposed Amendment NC13 "Offence to use digital ticket purchasing software to purchase excessive number of tickets" as tabled by Nigel Adams MP.

StubHub is owned by eBay and is a global online marketplace for event tickets. It is the world’s largest online ticket marketplace and offers fans a safe and convenient way to buy tickets to sporting events, concerts, shows, and theatre performances, as well as an easy way for fans to sell tickets when they cannot attend. We have been active in the USA since 2000 and in the UK since 2012.

BOTS

1.0 We support the proposed steps to tackle the use of "digital ticket purchasing software", also known as "bots". Bots, in this regard, are software programmes which allow individuals to cheat the ticket purchasing system, such as by queue-jumping online waiting rooms or bypassing limits on the number of tickets able to be bought. Bots harm all parts of the ticket industry, most obviously consumers.

2.0 We have long campaigned on this issue. Last month, we provided evidence to the US Senate Commerce Committee and have consistently supported both state and federal legislation in the US to tackle the misuse of bots.

3.0 Bots are used by almost every part of the internet and serve critical functions in search engines, e-commerce sites, news and weather. We are pleased that the proposed amendment is focussed on the misuse of bots in ticket buying as we do not wish to see a restriction on innovation and the legitimate use of bots and other essential pieces of software.

OTHER ANTICOMPETITIVE MEASURES

4.0 It is worth noting that bots are just one of many components within a range of anticompetitive and anti-consumer ticketing practices. These all serve as restraints on trade in the ticketing market. We would like to briefly draw the Committee’s attention to these other components to ensure members understand where bots fit into the broader picture.

5.0 Fans are rightly frustrated when they cannot obtain tickets when they go on sale in the primary market. Bots are one cause of this frustration. Other causes are listed below:

5.1 There is a lack of transparency in the primary market, meaning fans never know how many tickets actually go on general sale.

5.2 Primary sellers operate a practice known as "holdbacks" which results in a much-reduced number of tickets going on sale. The New York Attorney General released a report into ticket sales earlier this year, in which he found that less than half (46 per cent) of concert tickets are ever made available to the public. In some cases, these holdbacks can be even more extreme. There is evidence showing as little as 12 per cent of tickets for major headline acts are released for public sale. Ticket hold-backs are generally reserved for presales (see more below) and industry insiders, such as authorised secondary ticket agents; venues; promoters; fan clubs; artists’ guests; competitions, and all have the effect of removing tickets from the pool that make it to the general release.

5.3 Tickets are often put on sale in a single bloc at times which are inconvenient to most ordinary fans. Because the primary market has consistently under-invested in ticket distribution, fans often find themselves constantly dialling into phone lines which are constantly jammed, or pressing the refresh button on websites that constantly crash. It would be more sensible if tickets were sold in tranches and at more convenient times for fans. In addition, event organisers could ensure that supply and demand are better matched e.g. by adding extra tour dates or choosing larger venues. Finally, event organisers could reduce the percentage of tickets that are held back for corporates, VIPs, industry insiders and their own authorised secondary ticket agents.

6.0 Many artists, performers and sports clubs operate pre-sales. Fans are able to register their details and access a limited ticket sale ahead of the general release. This can be done through fan clubs, where fans register and receive certain perks and benefits ranging from being able to access new music early to receiving a "head start" on ticket sales, or a simple preregistration – normally within the days leading up to the general sale. Other actors also operate presales. For example, those on the mobile network O2 have "O2 priority" on certain events held at O2 venues across the country. In the US, those with an American Express card had pre-sale access to Cher tickets released in October 2016. However, this is often not clear to the average fan. Even when fans do get tickets in the general sale, there are often conditions imposed by ticket providers, including the right to invalidate or cancel tickets offered for resale. The intention is to make it difficult, if not impossible, for the purchaser to transfer or resell the ticket, such as through the use of e-tickets which are stored on credit cards or mobile devices. These restrictions can be imposed technologically or within the terms and conditions of sale. They prohibit consumers and fans from buying tickets as gifts; from giving away tickets to friends and family; from giving tickets as donations. They also prohibit a ticket-buyer from being able to pass on their ticket if they cannot attend the event. This is becoming an increasingly difficult issue for fans as more concerts go on sale further and further in advance of the show date. Most recently, Little Mix’s November 2017 tour in the UK has already gone on sale.

6.1 Some primary sellers cancel, or threaten to cancel, tickets that are sold outside of their authorised or affiliated secondary platforms. These restrictions ensure tickets can only be resold on platforms that have agreements in place with other platforms and serves to lock consumers into a single ecosystem, thereby discouraging competition among secondary ticket exchanges and preventing consumers from looking around for lower fees and better service.

6.2 A common justification for these restrictions is to combat fraud. StubHub takes great steps to prevent fraud on its site, resulting in an incidence rate of less than 0.01 per cent. In the rare case of fraud, StubHub offers a robust Fan Protect Guarantee, protecting buyers by providing a full refund, replacement tickets or if possible entry to the desired event. In reality, the true purpose of such restrictions is to restrict competition in resale and preserve event organisers’ own resale profits and arrangements with their own network of brokers and secondary ticket agents.

October 2016

 

Prepared 26th October 2016