May 7, 2019

Standing Committee on Canadian Heritage Sixth Floor, 131 Queen Street House of Commons Ottawa ON K1A 0A6

RE: Study Regarding the Online Secondary Ticket Sales Industry

Dear Madam Chair,

In support of StubHub’s appearance on May 7, 2019, we offer the following comments informing the Standing Committee on Canadian Heritage’s study on the online secondary ticket sales industry.

Owned by eBay, Inc. StubHub was founded in 2000 and revolutionized the secondary ticket market by providing fans a safe, transparent, and trusted marketplace to buy and sell tickets. Today, StubHub is a global business that operates in more than 40 countries, giving our customers access to the highest standards of consumer protection anywhere on the market. Our Canadian office, based in Toronto, employs nearly 170 people across the StubHub, eBay, and businesses.

StubHub’s commitment to the consumer interest is why we have earned the trust of fans and have more than 2.4 million registered users throughout Canada. Our services are available to Canadians in both official languages, and our users are protected by our industry-leading FanProtect Guarantee.

The FanProtect Guarantee1 assures that in those rare instances a problem occurs on our exchange, both buyers and sellers are protected. Namely, ticket buyers are guaranteed either comparable or better replacement tickets to the event, or when that is not possible, a complete refund inclusive of fees.

StubHub believes that a fair, secure, and competitive ticket marketplace unequivocally supports the interests of fans. It drives industry players to compete on user experience, fees, consumer protections, and service. It also provides fans greater access to the events they want to experience and the ability to purchase tickets at a fair and market-driven price.

In recent years, StubHub’s ability to fulfill its mission has been complicated by various anticompetitive and anti-consumer practices in the ticket industry. Counterproductive restrictions can come in the form of government policies, ticket issuer practices, and misused technologies.

Restrictive and anti-consumer practices witnessed in today’s marketplace include obscurity around ticket allocations, particularly the lack of transparency around the number of tickets available for sale

1 “FanProtect Guarantee”, StubHub: https://www.stubhub.com/promise

500 KING STREET WEST | SUITE 200 | TORONTO, ON | M5V 1L8 | STUBHUB.CA

to the general public; the use of BOTS to unfairly purchase tickets; and restrictions on the transfer or resale of tickets that limit fans’ ability to transfer, give away, or resell the tickets they have rightfully purchased.

StubHub supports your intent to facilitate a comprehensive and meaningful dialogue regarding how tickets are bought and sold. We offer further commentary on the following issues:

ACCESSIBILITY & TRANSPARENCY

The use of automated software, or “bots”, to skip ahead of virtual waiting queues and bypass limits set on the number of tickets an individual can purchase provides an unfair advantage over the average fan. StubHub supports, and will continue to support, legislation prohibiting the use of bots that is substantive, comprehensive, and inclusive of a range of issues impacting fans’ access to tickets.

Anti-bots laws should be strongly enforced and entities who abuse the law should be penalized accordingly. Strong enforcement of anti-bots laws requires cooperation between the primary ticket market and relevant enforcement agencies. Without such cooperation, enforcement agencies will not be in a position to identify or penalize violators of the law.

Bots are often singularly blamed as the reason fans have difficulty accessing tickets. However, it is important to note that another major contributor is that large percentages of tickets are actually never put on sale to the general public. Ticket issuers, artists, promoters, venues, and others in the primary market frequently hold back large percentages of tickets for industry insiders and various pre-sales.

According to a report by the New York Attorney General’s office, an average of 46% of tickets go on sale to the general public during the general on-sale. The remaining 54% are held back for industry insiders, artists, fan clubs, credit card pre-sales, and other sources. The average number of tickets made available to the public falls to 25% for top concerts and was noted to be as low as 12% for one concert at Madison Square Garden2.

Last spring, the CBC reported that only 96 seats were originally made available for sale to the general public for the Leafs first home playoff game3. This followed comments in 2016 by the National Hockey League Commissioner suggesting that over 90% of tickets to the World Cup of Hockey in Toronto were sold in advance of the general on-sale4.

2 Office of the New York State Attorney General. “Obstructed View: What’s blocking New Yorkers from Getting Tickets”. https://ag.ny.gov/pdfs/Ticket_Sales_Report.pdf 3 CBC. 2018. “Fans shut out: Only 96 seats available to the general public for Leafs first home playoff game”: https://www.cbc.ca/news/canada/toronto/leafs-tickets-1.4613313 4 “Bettman says World Cup ticket sales are over 90%. Adds games will be sold out” … “They don’t go on sale to the general public until Aug 18”: https://twitter.com/wyshynski/status/765951334935822338

500 KING STREET WEST | SUITE 200 | TORONTO, ON | M5V 1L8 | STUBHUB.CA

In some instances, tickets that have been held back from the general onsale are gradually released over time leading up to the event. These tickets are often priced differently than those originally sold5. Typically the new prices reflect the market rates established by the secondary market. One platform categorizes this ticket-sale model as “Platinum Tickets”6.

Understanding ticket distribution and availability produces a clearer picture of event accessibility and helps to inform fans’ decisions on when, and if, to buy tickets. Absent this information, we have the situation that exists now, which can be consumer frustration when tickets “sell out” quickly with no clear impression of why.

An economist from the University of Victoria, who is known for his research on the event ticket market, recently stated: "If consumers have no idea about the number of tickets that are released and the different channels and the different prices, then everybody's in the dark.”7

Legislation designed to address the issues impacting fans’ ability to access tickets would not be complete without ticket allocation and distribution transparency requirements on the primary market. StubHub believes providing information on the number of tickets available for sale will help consumers make better informed purchasing decisions and help alleviate fan frustration.

PRICING & CONSUMER PROTECTION

Many jurisdictions have recognized that regulatory models that attempt to artificially control sales prices, like “price caps”, ultimately harm fans. As such, several provincial governments have elected not to legislate in this area, or in some cases, have made the decision not to bring existing statute into force.

As noted by a litany of observers, including the Canadian Chamber of Commerce and the broader live event industry, the imposition of price caps would undermine consumer protections and access to events by diverting sales off secure platforms and out of the enforcement reach of governments. These

5 Toronto Star. 2018. “Got tickets to Saturday’s Bruno Mars show? The guy sitting beside you may have paid hundreds of dollars less“: https://www.thestar.com/news/investigations/2018/09/18/got-tickets-to-this-weekends-bruno-mars-show-heres-why-the-guy-sitting- beside-you-may-have-paid-hundreds-of-dollars-less.html 6 CBC Calgary. 2017. “ accused of misleading and overcharging fans with platinum seats“: https://www.cbc.ca/news/canada/calgary/ticketmaster-bruno-mars-platinum-tickets-1.4257427 7 CBC British Columbia. 2019. “What to know when navigating the murky world of concert ticket presales”: https://www.cbc.ca/news/canada/british-columbia/concert-ticket-pre-sales-1.5055711

500 KING STREET WEST | SUITE 200 | TORONTO, ON | M5V 1L8 | STUBHUB.CA

decisions are further supported by independent analysis conducted in the United Kingdom8, financial analysts9, media10, and music industry experts11.

Another consumer challenge in today’s ticket market includes the use of deceptive URLs to mimic the box offices of venues and teams. This practice is harmful to consumers and harmful to legitimate resale websites as it perpetuates a negative image of the secondary ticket market.

These sites are predominantly designed to manipulate search engine results and frequently do so by mimicking primary market ticket sources. Consumers are often left thinking they are buying tickets directly from the box office when they are actually purchasing from a resale website. Furthermore, consumers may be discouraged from shopping around as many believe (right or wrong) that the best ticket prices are found in the primary market.

These sites typically source their ticket inventory, seat maps, payment processing, and customer service from an affiliated website. They offer no added value to the consumer, however they regularly charge much higher service fees than their “source" sites.

URLs should not be used to deceive customers into thinking they are shopping somewhere they are not. Google has attempted to regulate this practice, however their current policies only apply to paid ads, not organic search results. Additionally, without government action, consumers have limited recourse to take action against one of these sites when they are deceived.

StubHub supports legislation preventing the use of deceptive URLs for all ticket sale websites. Legislation to this effect has been adopted in several U.S. states, including New York, and the Federal Trade Commission is scheduled to discuss the issue at an upcoming workshop on the online ticketing market in June 2019.

CHOICE AND MARKET COMPETITION

A competitive ticket market benefits fans as marketplaces compete on user experience, customer service and fees. Further, competition in the market allows fans to have multiple access points to buy and sell tickets to the events they want to attend.

Yet, ticket issuers and primary ticket platforms are increasingly using anticompetitive and anti- consumer tactics that hinder fans’ ability to use, transfer, give away or resell the tickets they have

8 Waterson Report: Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities, “Price Caps”, Page 152. 9 Krisko, John. 2017. “Kathleen Wynne’s price controls for concert tickets are an encore in failure”. Financial Post: https://business.financialpost.com/opinion/kathleen-wynnes-price-controls-for-concert-tickets-is-an-encore-in-failure 10 Soupcoff, Marni. 2017. “Legislation banning scalper bots will cause more problems than the one its trying to solve”. CBC: https://www.cbc.ca/news/opinion/scalper-bot-legislation-1.4375640 11 Cross, Alan. 2017. “Ontario’s proposed concert ticket legislation is dumb and doomed to fail”. http://ajournalofmusicalthings.com/ontarios-proposed-concert-ticket-legislation-is-dumb-and-doomed-to- fail/?utm_source=Alan+Cross%27s+Newsletter&utm_campaign=8af3edf8f7- RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_6ce8d25fda-8af3edf8f7-82592069

500 KING STREET WEST | SUITE 200 | TORONTO, ON | M5V 1L8 | STUBHUB.CA

rightfully purchased. Such tactics include non-transferable ticketing (will call-only, mobile-only ticket12, credit card entry13, etc.), extra fees to obtain traditional hard-stock tickets14, ticket cancellations15, and restrictive terms and conditions placed on the original ticket sale.

In some instances, these restrictions are designed to eliminate the ability to transfer, give away, or resell their ticket at all. This is particularly challenging in an industry where primary ticket sellers do not typically offer refunds for consumers who no longer want or can use the ticket they have purchased.

In more instances, these restrictions are used to control how a consumer can transfer, give away, or resell the ticket they have purchased. As more primary ticket issuers continue to offer their own secondary ticket sales platforms, these restrictions are typically designed to eliminate competition and prohibit consumers from using competitive marketplaces.

Further, we have now seen instances where ticket issuers are cancelling legitimate tickets on the sole basis that they were resold through platforms that were not “authorized”. Consumers who have purchased legitimate tickets should not be denied entry to an event based on a ticket issuer’s attempt to control the entire ticket marketplace and shut down competition.

StubHub supports legislation that ensures consumers have the right to purchase a freely transferable ticket at the point of sale and prohibits ticket issuers from penalizing consumers on the basis that they bought or resold a ticket. Several U.S. states have passed legislation to this effect, including New York. Similar consumer protections have been proposed in legislation pending in Ontario.

CONCLUSION

Thank you for the invitation and opportunity to inform the Standing Committee’s interest in this issue. We look forward to an ongoing and productive discussion. Your commitment to a balanced and comprehensive dialogue about the global event ticket market and how Canadian consumers can be better positioned within it is appreciated.

Sincerely,

Laura Dooley StubHub Inc. Head of Global Government Relations

12 NBC: “(…) tickets will only be accepted electronically, and they won’t be sent out until the day before the concert”: https://www.valleynewslive.com/content/news/New-ticket-rules-cause-confusion-for-Ed-Sheeran-concert-goers-497064701.html 13 Global News. 2017. “Ticketmaster’s new anti-scalping strategy to blame for massive U2 lines: BC Place”: https://globalnews.ca/news/3449843/u2-bc-place-concert-delays-2017-ticketmaster/ 14 Montreal Gazette. 2017. “What the Puck: Canadiens club season-ticket holders with extra charge”: https://montrealgazette.com/sports/hockey/nhl/montreal-canadiens/what-the-puck-canadiens-club-season-ticket-holders-with-extra- charge 15 LVSportsBiz: 2018. “Golden Knights cancelling season ticket accounts (…)”: https://lvsportsbiz.com/2018/09/18/golden-knights- cancelling-season-ticket-accounts-if-holders-re-sell-tix-through-non-verified-third-party-sites/

500 KING STREET WEST | SUITE 200 | TORONTO, ON | M5V 1L8 | STUBHUB.CA