Independent Review of Consumer Protection Measures Concerning Online Secondary Ticketing Facilities

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Independent Review of Consumer Protection Measures Concerning Online Secondary Ticketing Facilities Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities Presented to Parliament pursuant to section 94(3) of the Consumer Rights Act 2015 May 2016 Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities Contents Preface ........................................................................................................................................... 4 Executive Summary ...................................................................................................................... 6 List of Conclusions and Recommendations ............................................................................. 15 Main Report ................................................................................................................................. 24 Chapter 1. The Entertainment Ticketing Market ................................................................... 27 Chapter 2. Law, Compliance and Enforcement .................................................................... 39 Chapter 3. Primary Ticketing Market ..................................................................................... 75 Chapter 4. Potential and Actual Restrictions on Ticket Resale ........................................... 96 Chapter 5. Secondary Ticketing Market .............................................................................. 111 Chapter 6. Pricing of Tickets in the Market ......................................................................... 137 Chapter 7. Consumer Interests ............................................................................................ 153 Chapter 8. Future Considerations ....................................................................................... 169 Annex A: Conduct of the Review ............................................................................................ 172 Annex B: Published Call for Evidence ................................................................................... 174 Annex C: Analysis of Responses to Call for Evidence ......................................................... 181 Annex D: Circulation List for Call for Evidence ..................................................................... 184 Annex E: Analysis of the Consumer Survey ........................................................................... 188 Annex F: List of Organisations met during the review ........................................................... 190 Annex G: New York Attorney General’s Report ..................................................................... 192 Annex H: Some Simple Economics of Ticket Sales .............................................................. 197 Annex I: Practical Tips for Consumers................................................................................... 200 Annex J: Anonymised Arena Settlement Example ................................................................ 203 Annex K: Overview of Relevant Consumer Legislation ......................................................... 207 Annex L: History of Events Ticketing Legislation .................................................................. 216 Annex M: Complaints and Current Enforcement Action ........................................................ 217 Annex N: Published Guidance ................................................................................................. 219 2 Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities Annex O: Enterprise Act 2002 .................................................................................................. 220 Annex P: Glossary ................................................................................................................... 222 Annex Q: Bibliography ............................................................................................................. 224 3 Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities Preface Last Autumn, I was pleased to be invited by the Secretaries of State for Business, Innovation and Skills and for Culture, Media and Sport to lead the review into consumer protection measures relating to secondary ticketing facilities. This is a complex sector. Whilst it is still possible to see people outside venues for popular events buying and selling tickets, the internet has fundamentally changed the ticketing environment over the last ten years. This has made it easier for people to apply for tickets in the first place but also enabled the resale market to thrive. Ticketing, especially pricing, is something that attracts great public interest and invokes strong opinions. In compiling this report, I have striven to take an independent and objective view of the market. Although my remit has been consumer protection measures applying to the online resale of tickets, it was quickly apparent to me that to form views on this it was important to understand how the market as a whole worked. I am grateful to those that responded to the Call for Evidence, including members of the public, industry representatives, event organisers, Parliamentarians and consumer representatives for sharing their views and highlighting issues. I also met with a wide range of experts from the sector who shared their knowledge and expertise and met with me or the review team or spoke with us on the phone. Some of these came together in two group meetings towards the beginning and end of my review. I am also grateful to the civil servants who supported me on this project. Whilst they have been very useful in delivering the report, they have always been careful to ensure that my work was independent of Government. 4 Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities Experts have helped me to access the people and information I have needed in order to ensure timely delivery of this report. I would stress, however, that the views and conclusions contained in this report are my own. Professor Michael Waterson 5 Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities Executive Summary The Call for a Review 1. The Department for Business, Innovation and Skills (“BIS”) and the Department for Culture, Media and Sport (“DCMS”) jointly commissioned me to lead an independent review of consumer protection in the online ticket resale market (the secondary ticketing market). The aim of my review is to assess consumer protection measures applying to the re-sale of tickets for recreational, sporting or cultural events in the United Kingdom through online secondary ticketing facilities. My review fulfils the requirement under section 94 of the Consumer Rights Act 2015 (“CRA”),1 to review consumer protection measures in relation to secondary ticketing and report within twelve months. The Nature of the Event Ticketing Market 2. Tickets for an event happening in the UK can be bought either from a venue, an agent appointed by the event organiser or on the secondary ticketing market. Tickets can be physical, for example, paper tickets or they could be electronic, including machine- readable bar codes, credit or debit card entry, or wearable technology, such as wristbands or other wearable objects. Practically speaking, tickets are understood to provide a mechanism to demonstrate entitlement to access to an event. 3. Most tickets from primary agents will be sold at a fixed “face value” price plus any additional charges (booking fees, postage etc.) and valid tickets will normally guarantee entrance provided the identified terms and conditions (e.g. age restrictions) are complied with. 1 http://www.legislation.gov.uk/ukpga/2015/15/contents/enacted 6 Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities 4. Tickets on the secondary ticketing market can be offered at any price, and may attract add-on costs such as commission fees or postage. In principle, they provide a similar right to entry to primary tickets although they may be constrained by terms or conditions relating to resale, including the possibility of cancellation in the event of resale. In practice, cancellation is unusual and most online purchasers of resold tickets experience no problem, unless the ticket is either counterfeit or has been already used. Problems are more likely to arise for the consumer if they buy from illegal websites that falsely appear to be a reputable source of tickets, taking people’s money and then disappearing before the tickets are produced – these are illegal scams. How the Market Works 5. Although the focus of my review is the online secondary ticketing market, the reality is that this market cannot be considered in isolation from the primary ticketing market. This is because many of the issues encountered by secondary market ticket buyers stem from issues in the primary market or are influenced by the interaction between the primary and secondary ticketing markets. It is, therefore, important to understand how the primary market works before examining the secondary ticketing market. Primary Ticketing Market 6. The primary ticketing market is important to consider as it is the source of tickets that go onto the secondary market. Actions taken in the primary market will therefore influence what happens in the secondary market. Decisions taken on pricing will impact on the scope for resale and transaction and distributional
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