With an estimated value of $15.19 billion by 2020, the global secondary ticket market is as lucrative as it is controversial. Protests from campaign groups, such as FanFair Alliance, have highlighted fan and event organiser frustrations with the major secondary ticketing websites. These complaints have escalated into threats of, and indeed actual, legal claims brought by the UK’s Competition and Markets Authority (CMA).
Viagogo, one of the largest secondary ticketing websites, has been the subject of a legal claim brought by the CMA. Although Viagogo has now complied with the changes to its service required by the CMA and the legal actions have now been abandoned, the CMA has warned that it has not ruled out further action if problems resurface.
So, with increasing pressure from the regulators, what can secondary ticketing websites do to avoid litigation?
CMA requirements for secondary ticketing websites
Following the introduction of the Consumer Rights Act 2015, the CMA launched an investigation into the four major secondary ticketing websites (including Viagogo) amid growing concerns about the misinformation given to customers. The CMA required that each website overhaul their processes to ensure that any new ticket listed for resale on its website must include information about:
- whether there is a risk that the ticket buyer will be turned away at the door;
- which seat in the venue they will get; and
- the identity of the seller if it is a business.
The CMA warned that any failure to comply with these changes would result in enforcement action.
Three of the four major secondary ticketing websites complied with the CMA investigation and put in place measures to ensure that adequate information was provided to customers. Viagogo, however, failed to comply and didn’t make any changes to its information policies. In addition, the CMA found that the Viagogo website had failed to:
- prevent customers being misled by messages about the availability and popularity of tickets;
- make it easier for customers to get their money back under its guarantee; and
- ensure certain customers who made claims under Viagogo’s guarantee received the refunds they were entitled to.
The CMA proceedings against Viagogo
In November 2018, the CMA brought legal proceedings against Viagogo and was awarded a legally binding court order. This required the website to overhaul its business approach and ensure that it complied with UK law within a two-month deadline. Although Viagogo had made some changes to its website, the CMA took the view that its concerns had not been adequately addressed. Subsequently, in July 2019, the CMA brought contempt of court proceedings against Viagogo for failing to comply with the court order.
“A bolt from the blue” – the CMA drops all proceedings against Viagogo
In an unexpected U-turn, the CMA has announced this month that the court action against Viagogo has been abandoned. The regulator stated that Viagogo is now compliant with UK law, as the information for secondary ticket buyers is now much clearer. The CMA did, however, highlight the unsatisfactory time it took to reach this conclusion. The CMA will continue to monitor Viagogo and has not ruled out further action if more issues are identified.
What does this mean for the secondary ticketing market?
Although the secondary ticketing market shows no signs of slowing down, this case demonstrates an intention from the regulatory bodies to increase consumer protection. The CMA will work closely with the government to ensure that secondary ticket websites operate within the limits of UK law, which could result in harsher penalties for non-compliant operators.
Secondary ticketing websites should consider implementing the following policies to avoid being in breach:
- Ensure there is clear, genuine and easily accessible information about the face value of the ticket, who is selling the ticket and availability of the tickets.
- Provide information on the seat allocated to the ticket.
- Inform the customer of any risk that they will be refused entry at the venue.
- Make any money-back guarantee claims procedure clear, and ensure all valid claims are refunded.
- Comply with any regulatory notices and warnings, and implement changes as soon as possible.