The FTC cracks down on ticket scalpers issuing over $31 million in fines

Cal Jeffrey

Posts: 2,920   +765
Staff member
In a nutshell: Three companies specializing in buying up event tickets and reselling them have settled with the FTC to pay a fraction of the $31 million in fines levied against them for violating the BOTS Act. It is the first time the Federal Trade Commission has applied the 2016 law.

On Friday, the Federal Trade Commission announced that it fined three scalping companies for using bots to acquire sports and concert tickets. The scalpers allegedly circumvented purchasing limits through software, which is a violation of the Better Online Ticket Sales (BOTS) Act.

The three companies combined bought up more than 150,000 event tickets at the standard rate between 2016 and 2020 and sold them at a steep markup. They raked in an estimated $26.1 million in profit from the illegal resales.

"Not only does this deprive loyal fans of the chance to see their favorite performers and shows, it is against the law," said the FTC's Consumer Protection Bureau Director Andrew Smith.

Because the BOTS Act is a per-violation law, the scalpers collectively faced fines of over $31 million. However, due to their inability to pay, each company got off with significantly reduced penalties.

Concert Specials, Inc had $16 million in violations, which was reduced to not quite $1.6 million. Just In Time Tickets was looking at $11.2 million in fines but pleaded down to $1.6 million. The FTC levied $4.4 million in penalties at Cartisim Corp, but reduced its fine to about $500,000.

The settlement comes to approximately $3.7 million, an 88-percent reduction in fines. As part of the agreement, the companies will also be required to maintain permanent records going forward showing they are in compliance with the BOTS Act. A district judge still has to sign off on the settlement.

The FTC notes that this is the first time it has applied the BOTS Act since it was enacted in 2016. The law only applies to using software to buy event tickets, but from scalpers' continued use of bots to buy up PS5 and XBSX consoles, it seems high time that Congress look into expanding this legislation to include other industries.

Image credit: Aceshot1

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candle_86

Posts: 729   +729
Yes because the government can solve all of our problems and make our lives better, has that ever actually happened once in the entire history of mankind. it's just going to raise prices because there's more regulatory bull crap they have to put up with.
 

brucek

Posts: 772   +1,063
TechSpot Elite
A reasonable action focused on the right targets. You're never going to stop small-scale scalping at the individual level, but you can certainly prosecute large commercial instances of it.

I don't agree this is one of those "all costs, no benefits" regulations. It costs less money to not develop a bot than to develop it, and it costs less money to not have to defend against an industrial bot farm than to have to. It's certainly a lot cheaper than putting retailers or manufacturers through even larger process changes like requiring hard identity verification, refusing electronic orders, issuing tickets to a named and validated purchaser only and declaring them non-transferrable, etc; one or more of which was eventually going to become required as the emboldened bot operators eventually reached the scale where no regular user customer could ever make a regular purchase.
 

psycros

Posts: 3,407   +3,911
The feds have had the laws in place to go after these people for FOUR YEARS. And this is the first time they've actually done it. The only reason they even bothered is because professional sports is huge money and has the connections to get the government to actually do its job. Sickening.
 

Uncle Al

Posts: 8,001   +6,775
If the FTC wants to be taken seriously they need to be a lot tougher and not wishy-washy on collecting fines and penalties. Eliminating ticket scammers is not some big corporate industry that will damage the economy by their demise but continuing to allow them to get away with screwing the public certainly will and it does nothing for the "Serious" image of the FTC. The FTC also need to expand their reach to all those scammers out there that are doing the same things to game machines, collectables, and anything else that their actions would improve access to good by the general public.
 

Cal Jeffrey

Posts: 2,920   +765
Staff member
The feds have had the laws in place to go after these people for FOUR YEARS. And this is the first time they've actually done it. The only reason they even bothered is because professional sports is huge money and has the connections to get the government to actually do its job. Sickening.
To be fair, investigations do take time, and the FTC did charges them with violations going all the way back to 2016, when the BOTS Act was signed.
I wish FTC has the balls to go after big guns, including the arrogant company that boasted of not regretting scalping PS5s.
Unfortunately the BOTS Act only covers ticket sales. But I agree, lawmakers need to expand it to cover other products where scalpers are prevalent in disrupting commerce. There is no doubt that PS5 and XBSX scalpers have been using bots to quickly deplete inventories as soon as store receive shipment so it's essentially the same thing that is going on with ticket sales. So the ;aw would not even have to be changed all that much. They would only need to include other classes of product.