Hunton Retail Law Resource

Last week marked a double milestone for the FTC: Rebecca Slaughter assumed the role of Acting Chair, and the agency brought its first enforcement action under the Better Online Ticket Sales Act (“BOTS Act”), 15 U.S.C. § 45c(a)(1).

Enacted in 2016 but somewhat dormant until now, the BOTS Act entitles the FTC to proceed against any person who “circumvent[s] a security measure, access control system, or other technological control or measure on an Internet website or online service that is used by the ticket issuer to enforce posted event ticket limits or to maintain the integrity of posted online ticket purchasing rules.” The statute is meant to address ticket resellers using programs or other pieces of technology—like bots—to instantly buy up hundreds or thousands of tickets to a concert or game as soon as they go on sale, only to sell them again at a massive upcharge.

The three ticket brokers involved in the FTC’s sweep—Concert Specials, Inc. and Steven Ebrani, Just In Time Tickets, Inc. and Evan Kohanian, and Cartisim Corp. and Simon Ebrani—allegedly ran the gamut of strategies that violate the BOTS Act to buy thousands of tickets on Ticketmaster: ticket-buying bots, CAPTCHA bypasses, fake names and addresses, hundreds of different credit cards, and IP address maskers. The proposed consent orders collectively enter civil penalties totaling $36.1 million, much of which will be suspended due to the defendants’ inability to pay. The orders also require the defendants to submit BOTS Act compliance reports to the FTC, report several different business changes to the Commission, and keep records relating to their online ticket purchasing activity for ten years.

Acting Chair Slaughter issued a concurring statement, calling the cases “a first step in fixing the broken market for tickets to live events.” Although her statement focuses on the “unscrupulous actors” who took advantage of “consumers whose typing fingers were no match for” ticket-buying bots, she found plenty of blame to go around in the ticket market. Her statement refers readers to her prior remarks on the need for rulemaking to address some ticket sellers’ practice of holding back consumer fees until late in the ticket buying process.

In any case, there is a new FTC sheriff in town, and a newly-used FTC enforcement power: This certainly could be a signal that more of the same is to come. With the change in power in DC, retailers would be wise to ensure their compliance with all laws and regulations, whether or not there has been the threat of enforcement in the past.