Secondary ticket sellers on alert as Australia’s ‘green and gold decade’ of major sports events approaches

On 18 May 2022, the Federal Court of Australia dismissed an appeal by online ticket reseller, viagogo AG, against the Federal Court’s earlier decision to fine viagogo AUD$7 million for making false or misleading representations in relation to the online resale of sports and entertainment tickets to consumers in Australia. This decision by the Federal Court of Australia comes against the backdrop of the Australian Government’s decision to introduce a new regulatory standard to promote transparency and strengthen the consumer protection framework in the secondary ticket sale market as Australia readies itself to embark on a ‘green and gold decade’ of hosting fans from all over the world at major sports events.

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Introduction

Ticket scalping and the on-selling of tickets to sporting and entertainment events is a practice that event organisers and sporting organisations have been trying to detect and deter for years. This is because the unauthorised on-selling of tickets has the potential to seriously undermine their efforts in ensuring the integrity and fairness of the ticket sales process, and because counterfeit tickets or significantly inflated ticket prices will create a negative experience for fans.

Event organisers and sporting organisations usually seek to rely on a number of operational and legal measures in order to deter and prevent these practices, which include the use of strict contractual obligations relating to the reselling of tickets, paperless and customer-identification related ticketing processes, ‘official’ ticketing ballots and ‘official’ online ticketing auction processes.

Whilst helpful, these efforts have been somewhat hampered by issues relating to the legality and contractual enforceability of ticket terms and conditions (which, as discussed in the case of eBay International AG v Creative Festival Entertainment Pty Ltd (2006) FCA 1768, can give rise to misleading and deceptive conduct issues in circumstances where the relevant term/s sought to be relied upon are not adequately brought to the consumer’s attention at the time of purchase), as well as the absence of a robust and nationally uniform legislative framework dealing with the issue of ticket scalping and on-selling in the secondary market in Australia.

The legal framework

In Australia, there is no overarching federal legislation which prohibits the practice of ticket scalping or on-selling in the secondary ticket sale market. Instead, the practice of reselling tickets to sporting and entertainment events is currently regulated through a patchwork of consumer protection and major events legislation which exist at a federal, and state and territory level and which, when taken together, provide a certain level of protection for both consumers and event organisers.

At a state and territory level, ticket reselling and ticket scalping are primarily regulated under ‘major events’ legislation which restricts the reselling or scalping of tickets in that state or territory. For example:

  • in Queensland (which will be involved in the hosting of the Brisbane 2032 Olympic and Paralympic Games and, likely, the 2025 British and Irish Lions Tour of Australia), the Major Sports Facilities Act 2001 and the Major Events Act 2014 both make it an offence for a person to resell tickets to a particular sports facility or event for a price which is greater than 10% above the original price of the ticket; and
  • in NSW (which will be involved in the hosting of the Men’s T20 Cricket World Cup in 2022, the Men’s Rugby World Cup in 2027 and Women’s Rugby World Cup in 2029, and, likely, the FIFA Women’s World Cup in 2023), the Fair Trading Act 1987 prohibits the resale of tickets to an event in NSW for a price which is greater than the original cost price, plus the transaction costs incurred in the original purchase, which are capped at 10% of the original ticket price.

At a federal level, the Australian Consumer Law (ACL) contains a number of consumer protections that can also be used to address issues arising from the resale of tickets in the secondary ticket sale marketplace. These include prohibitions relating to, for example, misleading and deceptive conduct (although, as noted above in relation to the case of eBay v Creative, this prohibition has in the past operated contrary to the interests of event organisers trying to prevent the practice of ticket on-selling in certain circumstances), false and misleading representations, unconscionable conduct, bait advertising and wrongly accepting payment.

The ACCC’s case against viagogo

The decision of the Australian Competition and Consumer Commission (ACCC) to take action against viagogo in the Federal Court of Australia followed the receipt of over 400 complaints from various artists, event organisers and other persons impacted by the online conduct of viagogo, including the prominent music band ‘Gang of Youths’, which launched a campaign petitioning for the removal of viagogo from the Australian secondary ticket sale market.

The ACCC’s allegations centred on a number of alleged breaches of the ACL by viagogo, including that viagogo made a number of false or misleading representations in relation to the resale of tickets for live music and sporting events via its online website. More specifically, the ACCC alleged, and the Federal Court found, that viagogo had made a number of false or misleading representations to Australian consumers by:

  • stating that it was the “official” ticket seller for particular events, in circumstances where it was not the official ticket seller to such events;
  • stating that tickets to certain entertainment and sporting events were ‘scarce’, in circumstances where they were not;
  • advertising a headline price which failed to specify the total price for ticket, which was often considerably more (in one example, a ticket for an Ashes cricket test in 2017/2018 was advertised at $330.15, but sold for $426.81 after the booking fees were included); and
  • failing to adequately disclose to consumers that it was not a primary ticket seller, and was in fact a secondary ticket seller.

In finding against viagogo, Justice Burley of the Federal Court of Australia ordered viagogo to pay a penalty of AUD$7 million in light of the seriousness of the breaches of the ACL and the conduct of viagogo which Burley J considered demonstrated a level of deliberateness.

On 18 May 2022, the Federal Court dismissed an appeal by viagogo against the earlier decision of the Federal Court and upheld the $7 million penalty imposed for the significant breaches of the ACL by viagogo which are outlined above.

New disclosure requirements for online ticket resellers

Following the findings of the Federal Court in the case of ACCC v viagogo, and in response to the Australian Government’s broader inquiry into ticket reselling in Australia (which commenced in November 2017 following the ACCC’s decision to take action against viagogo), the Australian Government has introduced a new information standard[1] which will impose greater disclosure requirements on online ticket resellers (the “Ticket Resale Standard”).

The Ticket Resale Standard will apply to businesses that operate electronic platforms whose sole or dominant purpose involves the resupply of tickets to certain events (including sporting events, festivals, cultural events, entertainment events and other public performances) and will require them to comply with certain obligations, including the following:

  • the inclusion of a statement in the form: “This is a ticket resale service. You are not buying from a primary ticket provider”; and
  • the total price, excluding the delivery charge, that the consumer would reasonably be expected to pay to purchase the ticket from the original ticket seller,

each of which must be displayed in a ‘continuous, prominent, unambiguous and legible form’ on the website.

The Ticket Resale Standard will come into effect on 1 October 2022 and will, once effective, strengthen the consumer protection framework in the secondary ticket sale market in Australia by providing fans with greater transparency in relation to their ticket purchasing options.

There will also be significant monetary and non-monetary penalties in relation to non-compliance with these new obligations, highlighting the importance to operators of ensuring that their platform and the relevant ticket listings and prices on the platform comply with these new information disclosure requirements.

Closing

Whilst issues relating to ticket scalping and unauthorised on-selling of tickets are likely to persist beyond the introduction of these new regulations, these changes will go some way towards promoting transparency and integrity of ticket sales to major sporting and entertainment events in Australia which will be to the relief and benefit of consumers.

 

[1] Competition and Consumer (Australian Consumer Law – Electronic Ticket Resale Service) Information Standard 2022 (Cth).

Rich has been advising sports and media clients on a wide range of matters for over 14 years. Rich is a partner in our International Media, Entertainment and Sport Group, based in Sydney. He has a unique combination of private practice and in-house experience having spent 7 years as the General Counsel of Rugby Australia. Rich advises on a broad range of commercial, regulatory and contentious matters in the sports and media sector. He has particular expertise in sports media and marketing rights, sales and acquisitions of sports clubs, joint ventures, collective bargaining and other stakeholder arrangements, sports governance, and the implementation and enforcement of sports integrity policies and programmes.
Tom is an Associate in our EU & Competition group, based in Sydney, who has experience advising clients on corporate, commercial and regulatory issues. He regularly assists in advising the firm's communications and technology clients in relation to competition and consumer law, intellectual property law and corporate and commercial law generally.

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