Wake me up before you viagogo

The market for event tickets

Those who want to buy tickets for a sporting, cultural or entertainment event in the UK have two options. They can either make their purchase directly from the primary market (the venue or event organiser (or their agents if appointed)), or from a secondary seller. Secondary sellers are those sellers who have bought tickets on the primary market but for a number of potential reasons decide to sell on these tickets.

These secondary sellers can be split into three categories: (a) those who bought tickets with no intention of attending the event, (b) those who may have purchased more tickets than they require in the hope of selling the excess (potentially to help fund the tickets they did want), and (c) those who intended to attend an event but for whatever reason could no longer use the ticket. In order to facilitate the functioning of this secondary market, a number of internet platforms have emerged.

The existence of these three different types of seller, and their motives, as well as the interaction between the primary and secondary markets, makes this a complicated marketplace to regulate. As such, there have been a number of major issues that have arisen over the years. These include: profiteers bulk-buying tickets, event organisers or artists not seeing the profit from the resales (which are usually at inflated prices), and the potential unfairness of terms restricting resale of tickets (and associated issues and costs of enforcing these terms). The focus of this article is not on the pros and cons of the existence of a secondary market but instead on the measures being taken to ensure that this market operates fairly.

Consumer protection when purchasing from online resellers

The key pieces of legislation regulating the online resale of tickets can be found in the Consumer Rights Act 2015, as amended by the Digital Economy Act 2017 (the “CRA”), as well as the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, and the Consumer Protection from Unfair Trading Regulations 2008 and the Electronic Commerce (EC Directive) Regulations 2002.

The CRA includes specific secondary ticketing control provisions (these can be found at sections 90-95 inclusive). These requirements include providing customers with information about the ticket they are purchasing, for example information allowing the buyer to identify the seat, any restrictions on the ticket (for example age restrictions for the event), and the face value of the ticket. There are also provisions prohibiting the cancellation of tickets simply because they have been resold. This is subject to an exception where that right has been included in the terms and conditions in the original primary market and that term is not unfair.

The rules relating to unfair terms from the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 have also been transferred to the CRA. Schedule 2 of the CRA sets out a list of terms which may be regarded as unfair, which is commonly known as the ‘Grey List’. A potentially unfair term in the context of ticketing would be one which allows the venue or event organiser to change or modify the subject matter of the contract after the consumer has entered into it, for example by changing the date of a performance or cancelling it altogether.

CMA investigation and action

Following a two year compliance review into the secondary ticketing market, the Competition and Markets Authority (the “CMA”) launched an enforcement investigation in relation to suspected breaches of consumer protection law by internet ticket resellers. The CMA took enforcement action against three of these resellers (StubHub, GETMEIN! and Seatwave) in April. These companies committed to change their practices. However, viagogo did not make this pledge and have not, until now, amended their business methods.

The CMA does not have the power to levy administrative fines. It can however enforce the relevant legislation through the courts. In August of this year it issued court proceedings against viagogo and in November it secured a legally binding court order from the High Court.

This order states that viagogo must:

• provide customers with greater information at the time of purchase;
• let customers know if there is a risk that they may be turned away at the door;
• give customers information as to the identity of the seller, which in turn allows customers to benefit from enhanced legal protection where the seller is a business;
• not give misleading information regarding the availability and popularity of specific tickets (a practice that the CMA considers may lead to customers being rushed into purchases);
• make it easier for customers to get their money back in situations where things do go wrong; and
• ensure that only tickets that sellers actually own can be bought on their platform.

viagogo has until the middle of January 2019 in order to comply (the same deadline as set for the other resale sites who had committed of their own accord to change their practices). Failure to comply with the court order could lead to a fine for viagogo and even potential imprisonment for certain individuals within the company.

Implications and potential developments

There have been calls from some commenters to shut-down the secondary ticket market. However, as stated in Professor Waterson’s independent review into the industry (available here), it is recognised as serving a purpose. It creates opportunities for people who may not be able to commit to purchasing tickets when they first become available. Secondly, it allows the pressures of supply and demand to impact the price of tickets. People can then make value based judgements as to whether they wish to pay the current price. It is also true that some tickets may be offered at below the face value price, opening up the market to those who may not otherwise be able to afford to attend a particular event.

The CMA hopes that its actions will lead to greater transparency for consumers when buying tickets on the secondary market, which in turn will lead to increased consumer confidence in these sites.

For more information please contact Alex Griffiths on +44 (0)20 7438 2108 or at alex.griffiths@crsblaw.com.