Ontario Attorney General Yasir Naqvi recently announced that the provincial government is seeking public input to address the problems presented by so-called ticket bots. For those unfamiliar with this dystopian-like term, ticket bots are software programs that obtain tickets from an online ticket-selling platform beyond a specified limit, circumventing website fair purchase rules. These tickets are then typically resold, often at marked-up prices.
Ontario Attorney General Yasir Naqvi recently announced that the provincial government is seeking public input to address the problems presented by so-called ticket bots. For those unfamiliar with this dystopian-like term, ticket bots are software programs that obtain tickets from an online ticket-selling platform beyond a specified limit, circumventing website fair purchase rules. These tickets are then typically resold, often at marked-up prices.
In Ontario, ticket bots gained infamy in 2016 after they were blamed for immediate sellouts of Tragically Hip concerts that featured musician Gord Downie. Now, Naqvi says the provincial government is seeking “practical solutions.” The provincial consultation, which is currently available online until March 15, is part of a larger project to update current legislation and develop new rules about buying and selling event tickets.
In Ontario, the secondary ticket market was legalized in 2015. Before the amendments to the Ticket Speculation Act — which came into effect July 1, 2015 — selling tickets for greater than face value was prohibited. Now, the act allows for people to profit from the resale of tickets if sellers can provide authentication or offer a money-back guarantee for the ticket.
The act, however, does not tackle the problems presented by automated ticket purchases. Ontario’s intention to enact legislation follows recent efforts in the United States. Last year, the Better Online Ticket Sales Act became federal law south of the border. In December 2016, then-U.S. president Barack Obama signed into law prohibitions on the use of technology on a ticket-issuing website that enforces purchasing rules for events for more than 200 people. Violations are treated as “unfair or deceptive acts” under the Federal Trade Commission Act.
The BOTS Act gave the U.S. Federal Trade Commission or state attorneys general the enforcement mechanism needed to take civil action against ticket bot operators. In our opinion, if Ontario decides to make the use of ticket bots an unfair practice under its consumer protection legislation, it should consider departing from a strict parallel of the American solution in at least two ways. First, individual members of the public, and not merely the provincial government, should be given standing to start an action against the wrongdoer. Second, use of a ticket bot should be considered an independent wrong, and not just another type of unfair trade practice. South of the border, fans or industry stakeholders who are dissatisfied with ticket bot practices have to convince resource-strapped attorneys general or the Federal Trade Commission to pursue resellers under the BOTS Act. Although the secondary ticket market can be big business, high-cost investigations and prosecutions cannot be pursued every time a small-time reseller uses a ticket bot.
In Ontario, if fans or people or companies working in the entertainment industry could go to court themselves, the ticket bot prohibition would have a better chance of being enforced. To work effectively, the remedy would have to be available whether or not restitution or damages would otherwise be available. In Ontario, many consumer rights, including some rights in the face of unfair or deceptive trade practices, are set out in the Consumer Protection Act. The consumer may be entitled to rescind any agreement entered into with the wrongdoer and to seek restitution or damages. However, to pursue damages against a wrongdoer under the CPA, a consumer has to contract with a wrongdoer.
The requirement that a consumer have a contract with the ticket bot user to pursue damages does not comfortably fit in this context. What makes ticket bots wrong is not that they allow the reselling of tickets (which, as described above, was legalized in 2015) but that they circumvent fair ticket purchasing rules, leaving no tickets for primary market event-goers.
To craft and structure legislation that addresses this wrong, it may be useful to look to Canada’s Copyright Act, which includes a provision on circumventing technological protection measures that are used to control access to or use of copyrighted works. Under the Copyright Act, the circumvention of technological protection measures is prohibited independent of any prohibition on infringement of copyright. A similarly independent provision in consumer protection legislation could allow a primary ticket seller to pursue the ticket bot user, thus enhancing the likelihood of enforcement. Although a legal remedy to the ticket bot problem is welcome, industry practices may also offer long-term solutions.
Innovations such as Ticketmaster’s ticketless card-swipe solution have already helped curb ticket bot practices. For the Victoria Palace Theatre’s production of the hit musical Hamilton in London, England, Ticketmaster introduced the requirement that theatre-goers swipe the credit card used to pay for each ticket to gain entry to the venue. Similar innovations are already in practice in venues such as Massey Hall in Toronto.
For lawmakers, fans and people and companies in the entertainment industry, ticket bots have become a serious problem. It is encouraging to see the provincial government seek feedback on how to make sure everyone has a chance to buy tickets to shows at fair prices. At least now, the conversation has moved beyond the inner circle of the concert industry and into the living rooms of Canadians and their elected officials.
Paul Chodirker is entertainment counsel with Gilbert’s LLP in Toronto and Maya Bielinski is an articling student at the firm.
In Ontario, ticket bots gained infamy in 2016 after they were blamed for immediate sellouts of Tragically Hip concerts that featured musician Gord Downie. Now, Naqvi says the provincial government is seeking “practical solutions.” The provincial consultation, which is currently available online until March 15, is part of a larger project to update current legislation and develop new rules about buying and selling event tickets.
In Ontario, the secondary ticket market was legalized in 2015. Before the amendments to the Ticket Speculation Act — which came into effect July 1, 2015 — selling tickets for greater than face value was prohibited. Now, the act allows for people to profit from the resale of tickets if sellers can provide authentication or offer a money-back guarantee for the ticket.
The act, however, does not tackle the problems presented by automated ticket purchases. Ontario’s intention to enact legislation follows recent efforts in the United States. Last year, the Better Online Ticket Sales Act became federal law south of the border. In December 2016, then-U.S. president Barack Obama signed into law prohibitions on the use of technology on a ticket-issuing website that enforces purchasing rules for events for more than 200 people. Violations are treated as “unfair or deceptive acts” under the Federal Trade Commission Act.
The BOTS Act gave the U.S. Federal Trade Commission or state attorneys general the enforcement mechanism needed to take civil action against ticket bot operators. In our opinion, if Ontario decides to make the use of ticket bots an unfair practice under its consumer protection legislation, it should consider departing from a strict parallel of the American solution in at least two ways. First, individual members of the public, and not merely the provincial government, should be given standing to start an action against the wrongdoer. Second, use of a ticket bot should be considered an independent wrong, and not just another type of unfair trade practice. South of the border, fans or industry stakeholders who are dissatisfied with ticket bot practices have to convince resource-strapped attorneys general or the Federal Trade Commission to pursue resellers under the BOTS Act. Although the secondary ticket market can be big business, high-cost investigations and prosecutions cannot be pursued every time a small-time reseller uses a ticket bot.
In Ontario, if fans or people or companies working in the entertainment industry could go to court themselves, the ticket bot prohibition would have a better chance of being enforced. To work effectively, the remedy would have to be available whether or not restitution or damages would otherwise be available. In Ontario, many consumer rights, including some rights in the face of unfair or deceptive trade practices, are set out in the Consumer Protection Act. The consumer may be entitled to rescind any agreement entered into with the wrongdoer and to seek restitution or damages. However, to pursue damages against a wrongdoer under the CPA, a consumer has to contract with a wrongdoer.
The requirement that a consumer have a contract with the ticket bot user to pursue damages does not comfortably fit in this context. What makes ticket bots wrong is not that they allow the reselling of tickets (which, as described above, was legalized in 2015) but that they circumvent fair ticket purchasing rules, leaving no tickets for primary market event-goers.
To craft and structure legislation that addresses this wrong, it may be useful to look to Canada’s Copyright Act, which includes a provision on circumventing technological protection measures that are used to control access to or use of copyrighted works. Under the Copyright Act, the circumvention of technological protection measures is prohibited independent of any prohibition on infringement of copyright. A similarly independent provision in consumer protection legislation could allow a primary ticket seller to pursue the ticket bot user, thus enhancing the likelihood of enforcement. Although a legal remedy to the ticket bot problem is welcome, industry practices may also offer long-term solutions.
Innovations such as Ticketmaster’s ticketless card-swipe solution have already helped curb ticket bot practices. For the Victoria Palace Theatre’s production of the hit musical Hamilton in London, England, Ticketmaster introduced the requirement that theatre-goers swipe the credit card used to pay for each ticket to gain entry to the venue. Similar innovations are already in practice in venues such as Massey Hall in Toronto.
For lawmakers, fans and people and companies in the entertainment industry, ticket bots have become a serious problem. It is encouraging to see the provincial government seek feedback on how to make sure everyone has a chance to buy tickets to shows at fair prices. At least now, the conversation has moved beyond the inner circle of the concert industry and into the living rooms of Canadians and their elected officials.
Paul Chodirker is entertainment counsel with Gilbert’s LLP in Toronto and Maya Bielinski is an articling student at the firm.
