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UK regulator warns of enforcement action against secondary ticketing sites

A number of websites that facilitate the second-hand sale of tickets have been told to improve their practices by a UK regulator after it raised concerns about their compliance with consumer protection law.30 Nov 2017

The Competition and Markets Authority (CMA) said it would take enforcement action against secondary ticketing sites where it suspects they have breached the law. It said it will be "acting to address a failure by one website to comply fully with formal commitments it had previously given to improve the information provided about tickets advertised on its site".

The CMA highlighted a range of concerns at the end of an investigation into the market and outlined practices that the businesses should adopt.

Secondary ticketing sites "must be clear if there are restrictions on using a resold ticket that could result in buyers being denied access to an event", the CMA said.

The regulator also said that consumers should be notified on the websites "whom they are buying from", such as whether that is a business or event organiser, as well as whether they "can benefit from their legal rights". The websites should also ensure that customers are told "where exactly in a venue they will be seated", it said.

The CMA said that its investigation had identified a number of further concerns that it plans to look into further.

One area it will look at is whether claims made on secondary ticketing sites about the availability and popularity of tickets "create a misleading impression or rush customers into making a buying decision".

The CMA said it will also scrutinise how easy it is for customers to get their money back under a website's guarantee, as well as the practice of "speculative selling", which it described as where businesses advertise tickets for sale that they do not yet own and may therefore may not be able to supply.

The CMA said it would also look into concerns raised that some organisers of sporting events have sold tickets "as a primary seller directly through a secondary ticket website, without making this clear to consumers".

The CMA also outlined steps that event organisers can take when applying restrictions on the resale of tickets for their events (2-page / 309KB PDF) to address potential consumer harm and reduce the likelihood of the regulator "prioritising enforcement action". It said resale restrictions have the potential to constitute unfair contract terms and breach consumer protection law.

The CMA said the organisers should engage in "full and clear disclosure of any resale restrictions upfront" and put in place arrangements for consumers to exchange, return and / or resell tickets so as to enable the original buyer of the ticket "to recoup or mitigate any financial loss if they are unable to use the ticket".

The CMA also advised organisers to provide "full refunds" to any consumer whose ticket is voided, and further implement measures to help ensure that people buying resold tickets do not "lose out" where they have "not been fully and clearly informed" about the resale restrictions that apply.

Andrea Coscelli, CMA chief executive, said: "Secondary ticketing websites can offer an important service – by allowing people the chance to buy tickets at the last minute or giving them a chance to re-sell tickets they can no longer use. But our investigation has identified concerns that the law protecting consumers is being broken."

"Thousands of people use these sites and they have a right to know if there is a risk that they will be turned away at the door, who they’ve bought their ticket from or exactly what seat at the venue they’re getting for their money. We are putting our concerns to these websites and will be requiring the changes necessary to tackle them. We will use the full range of our powers to get the right outcome for these sites’ customers – including taking action through the courts if needed," he said.

Angelique Bret, an expert in consumer law enforcement at Pinsent Masons, the law firm behind Out-Law.com, said: “This is just one of a number of consumer protection investigations which the CMA is actively pursuing using its Part 8 powers under the Enterprise Act 2002. Other investigations include online hotel booking, online gambling, online dating, car rental and care homes. The CMA has extensive powers of investigation, including the ability to carry out ‘dawn raids’ at company offices, which have so far been more commonly used in the context of suspected anti-competitive cartel investigations.”

 “Although the CMA cannot impose fines on companies for unfair terms and conditions in the context of the Consumer Rights Act 2015, investigations are costly and intensive and can be damaging from a PR perspective.  Breach of the Consumer Protection from Unfair Trading Regulations 2008 can result in criminal sanctions. Businesses are taking a fresh look at their terms and conditions, in particular any introductory or special offers, given the increased risk of CMA enforcement action if there are consumer complaints,” she said.

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