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Regulation of sale of tickets and secondary ticketing

Introduction

The resale (sometimes called "touting" or "scalping") of tickets for entertainment events is probably almost as old as the events themselves, possibly dating back to Roman times

.

While there are legitimate economic reasons for the existence of a secondary market,

perceived abuses including high resale prices and misrepresentation about ticket restrictions led to the UK Parliament including legilsation in the Consumer Rights Act 2015.

Useful research and commentary on the existence and functioning of the secondary market is contained in:

* The Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities by Professor Michael Waterson (presented to Parliament pursuant to section 94(3) of the Consumer Rights Act 2015 - May 201);

* DIGITAL RESELLERS The Case for Secondary Ticket Markets Current Controversies No. 57By Dr Stephen DaviesJanuary 2018 (Institute of Economiuc Affairs)

The Consumer Rights Act 2015 (CRA) applies to all four UK jurisdictions, except the provisions relating to letting agents which apply only to England and Wales.

The CRA regulates the online secondary ticketing market; i.e. the market where tickets for sporting, recreational and cultural events are re-sold on the internet having been first bought or otherwise acquired on the primary market from an event organiser.

Regulation of the online secondary ticketing market

With effect from 27 May 2015, the legislation applies where a person (“the seller”) re-sells a ticket for a recreational, sporting or cultural event in the United Kingdom through a secondary ticketing facility.

A 'secondary ticketing facility” means an internet-based facility for the re-sale of tickets for recreational, sporting or cultural events.

Information to be given

The seller and each operator of the facility must ensure that the person who buys the ticket ('the buyer') is given specified information where this is applicable to the ticket.

The specified information is:

(a) where the ticket is for a particular seat or standing area at the venue for the event, the information necessary to enable the buyer to identify that seat or standing area*,

(b) information about any restriction which limits use of the ticket to persons of a particular description, and

(c) the face value of the ticket (i.e.the amount stated on the ticket as its price)

* The information necessary to enable the buyer to identify a seat or standing area at a venue includes, so far as applicable—

- the name of the area in the venue in which the seat or standing area is located (for example the name of the stand in which it is located),

- information necessary to enable the buyer to identify the part of the area in the venue in which the seat or standing area is located (for example the block of seats in which the seat is located),

- the number, letter or other distinguishing mark of the row in which the seat is located, and

- the number, letter or other distinguishing mark of the seat[, and

- any unique ticket number that may help the buyer to identify the seat or standing area or its location].

Disclosure of seller's status

If the seller is within one of the categories set out in subsection 90(6) of the CRA, the seller and the operator of the resale facility must disclose to the buyer that the seller is within the subsection and which category he falls under.

The section 90(6) categories are where the seller is:

(a) an operator of the secondary ticketing facility,

(b) a person who is a parent undertaking or a subsidiary undertaking in relation to an operator of the secondary ticketing facility,

(c) a person who is employed or engaged by an operator of the secondary ticketing facility,

(d) a person who is acting on behalf of a person within paragraph (c), or

(e) an organiser of the event or a person acting on behalf of an organiser of the event

The Information required must be given the buyer is bound by the contract for the sale of the ticket.and iin a clear and comprehensible manner.

[see: CRA s.90]

Prohibition on cancellation or blacklisting


An organiser must not cancel a ticket for a recreational, sporting or cultural event in the United Kingdom offered for sale through a secondary ticketing facility.merely because the seller has re-sold the ticket or offered it for re-sale unless:

(a) a term in the original contract for the sale of the ticket provided for its cancellation if it was re-sold offered for re-sale by the buyer under that contract; and

(b) that term was not unfair for the purposes of CRA Part 2 (unfair terms).

An organiser of the event must not blacklist the seller merely because the seller has re-sold the ticket or offered it for re-sale unless:

(a) a term in the original contract for the sale of the ticket  provided for the blacklisting of the buyer under that contract if it was re-sold or offered for re-sale by that buyer; and

(b) that term was not unfair for the purposes of CRA Part 2 (unfair terms).

(4) In subsections (2) and (3) “the original contract” means the contract for the sale of the ticket by an organiser of the event to a person other than an organiser of the event.

'Cancel' includes any steps taken by the event organiser which result in the holder for the time being of the ticket no longer being entitled to attend that event.

'Blacklist' occurs if the organiser takes steps to prevent the person from acquiring a ticket or to restrict the person's opportunity to acquire such a ticket.

[see: CRA s.91]

Duty to report criminal activity


An operator of a secondary ticketing facility has a duty to report to the police if he knows that a person has used or is using the facility in such a way that an offence has been or is being committed, and the offence relates to the re-sale of a ticket for a recreational, sporting or cultural event in the United Kingdom.

Comment: reference to an 'offence' is to an offence under criminal law in the UK. It does not refer to breaches of the above regulation onresales of vent tickets which are ot offences (see Enforcement below).

[See: CRA s.92]

Enforcement

Enforcement of the event ticket resale regulations is the responsibility of local Trading Standards in Great Britain and the Department of Enterprise, Trade and Investment in Northern Ireland. There are no criminal penalties.

The Competition and Markets Authority also has law enforcement responsibilities and has taken action against leading ticket resellers.

An enforcement authority may impose a financial penalty (up to a maximum of £5,000) if is satisfied on the balance of probabilities that a person has breached a duty or prohibition imposed by the regulations. There is a defence if the breach was due to a mistake, reliance on information supplied to P by another person, the act or default of another person,an accident, or another cause beyond the person's control, and the person exercised due diligence.

There are procedural provisions applying to service of a notice to impose a penalty, right to make representations and right of appeal.

[See: CRA s.93 and Sched.10]

Other relevant legislation

Other legislation applies generally which covers the market, including:

* The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) which provide that certain information must be provided when goods, a service or digital content are sold by a trader to a consumer, including sales concluded at a distance (e.g. online);

* The Criminal Justice and Public Order Act 1994 s.166 which regulates the re-selling of tickets for certain football matches;

* The Fraud Act 2006 and the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) which aim to protect buyers from misleading or fraudulent sales; and

* Unfair Terms in Consumer Contracts - Consumer Rights Act 2015 Part 2

The CRA provisions apply to tickets for all recreational, sporting and cultural events taking place in the UK(49).

Further information

The businesscompanion offers guidance on the sale and resale of tickets.

The Department for Business, Energy & Industrial Strategy has published detailed Guidance for Business


What's new?

26/04/2018: Breaching of Limits on Ticket Sales Regulations 2018

SI 2018/Draft: Provisions are made to make it a criminal offence to purchase more tickets than the maximum permitted for a recreational, sporting or cultural event in the UK, where the purchase is made electronically through the use of software designed for this purpose, and where the intent is to obtain financial gain.

22/04/2018: New law to ban ticket touts from using ‘bots’ to dodge security measures


The Government is to lay before Parliament secondary legislation to prohibit the use of online ‘bot’ programs to circumvent security measures and bulk buy more tickets than allowed by event organisers.The legislation will create a new offence will mean touts using automated software to bulk buy tickets for resale on secondary ticketing sites.

06/04/2018 New rules on ticket resale aim to protect consumers

New rules requiring more information from sellers on secondary ticket websites have come into force from 6 April 2018. Resellers are now required to supply the unique ticket number (UTN) to a buyer, if the event organiser specifies one, helping to identify the ticket’s seat, standing area or location, in order to better protect consumers.

[Page updated: 30/04/2018]

 

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