Ticketmaster Must Face FTC Ticket Resale Lawsuit as Judge Says BOTS Act Applies

A judge says Ticketmaster can be sued by the Federal Trade Commission (FTC) for allegedly enabling mass-scale ticket reselling on its secondary market.

A Monday (Sept. 28) court order, obtained and first reported by Billboard, denies Ticketmaster’s motion to dismiss the bombshell lawsuit brought by the FTC a year ago. The decision does not endorse the truth of the federal agency’s claims, but it holds that they are legally sufficient to move forward into the next phase of litigation.  

The FTC sued Ticketmaster and its parent company Live Nation under the Better Online Ticket Sales (BOTS) Act, which makes it illegal to circumvent a ticket issuer’s security measures. The agency claimed Ticketmaster violated this statute by allowing brokers to bypass its ticket purchasing limits with hundreds or sometimes thousands of accounts under fake names. According to the lawsuit, Ticketmaster enabled this conduct so that brokers would resell large swaths of tickets on its own secondary market, thus generating billions of dollars in resale fees for the platform.

Ticketmaster’s leadership denies these allegations, with Live Nation legal chief Dan Wall testifying before Congress earlier this year that the company has “walked the walk” on anti-broker initiatives to protect artists and fans. But Ticketmaster’s motion to dismiss argued that the FTC lawsuit has an even more fundamental defect: namely, that the BOTS Act is only meant to be wielded against individual resellers, not the ticketing platforms that host them.

Judge Maame Ewusi-Mensah Frimpong, however, roundly rejected this argument in Monday’s order. “The BOTS Act does not preclude platforms from facing liability,” wrote the judge, “and the court will not read it as doing so.”

According to Judge Frimpong, the FTC’s lawsuit lays out sufficient allegations that Ticketmaster allowed ticket brokers to bypass purchase limits. The judge cited an internal email in which a senior executive said they “turn a blind eye as a matter of policy” to this conduct, as well as other communications that allegedly show Ticketmaster was aware of specific brokers who frequently generated fake accounts.

“Upon identifying violators, Live Nation and Ticketmaster could have implemented measures to curtail continuing violations of ticket purchase limits,” wrote Judge Frimpong. “However, the FTC maintains that Live Nation and Ticketmaster ‘have reduced, discontinued, or declined to implement the use of tools that could effectively enforce ticket limits against brokers,’ thereby enabling circumvention. Thus, the complaint illustrates that Live Nation and Ticketmaster had knowledge of the violations, had the opportunity and means to counter the violations, but elected to allow scalpers and brokers to bypass ticket purchase limits.”

The judge also ruled that the FTC can level deceptive business practice claims against Ticketmaster over drip pricing — i.e., the practice of tacking on additional fees at checkout. Though Ticketmaster says it now employs all-in pricing, Judge Frimpong says the long-term use of a mere “plus fees” qualifier could be considered “vague and ambiguous” enough to sustain the FTC’s claims.

Reached for comment on Monday’s decision, Ticketmaster said in a statement, “Ticketmaster remains the leader in the fight against bots and other technical exploits that scalpers use to steal tickets from real fans. We continue to believe that this lawsuit is misguided and will ultimately fail.”

A rep for the FTC did not immediately return a request for comment. The case will now enter the evidence discovery phase, followed by an eventual trial unless a settlement is reached.

The lawsuit is part of the FTC’s recent emphasis on BOTS Act enforcement under a directive from President Donald Trump. In addition to the Ticketmaster lawsuit, the agency sued broker Key Investment Group last year for allegedly using fake Ticketmaster accounts to flip tickets for Taylor Swift’s record-breaking Eras Tour. The FTC received a judge’s green light to move forward with that case in April.

Meanwhile, Live Nation and Ticketmaster are wrapped up in a high-stakes antitrust lawsuit that could have huge implications for their future. A jury ruled at trial that the combined companies had worked to suppress competition, and now dozens of state attorneys general are urging a judge to break them up. Live Nation denies all wrongdoing and says divestiture is unnecessary.