The proposed changes could apply to up to 75,000 sellers, representing 90% of the value of tickets in the UK.
Colin Smith
Tighter rules are needed to stop ticket buyers being "ripped off by unscrupulous resellers", the UK's competition watchdog says.
Companies like Viagogo and StubHub could be shut down or fined up to £5,000 per ticket under new proposals from the Competition and Markets Authority (CMA) to hold them responsible for policing primary sellers.
As events restart, the authority says it is concerned resellers are still speculatively selling tickets they don't own and putting fans at risk of being turned away at the door.
READ MORE:
It worries professional outfits could be illegally using bots to buy up tickets, a practice it frequently receives complaints about.
"We want the Government to take action to strengthen the current laws and introduce a licensing regime for secondary ticketing platforms," CMA Senior Director George Lusty said.
That regime would involve making secondary ticketers responsible for incorrect information on their sites by charging a levy to fund a new, more responsive licensing system.
While real strides have been made to increase transparency and address potentially illegal practices over recent years, the CMA says its powers are limited.
Just two bodies are able to enforce compliance - the National Trading Standards and police - and neither has the expertise or funding to tackle the issue completely: "We are not aware that either plan to prioritise further action to investigate these issues," the CMA says.
Consumer rights groups Which? and the FanFair Alliance said Government should implement the CMA's recommendations as soon as possible.
But FanFair Alliance Campaign Manager Adam Webb said the group's enthusiasm is tempered by the slow pace of progress to date.
"We believe there's enforcement the CMA could start immediately," he said, citing Viagogo's breach of a 2018 court order.
"This has gone on for far too long."
A Viagogo spokesperson said the UK should use the opportunity presented by Covid-19 to strengthen collaboration between event organisers, venues, ticketers and resellers.
"We are open to all ideas as to how that is achieved but it must be carefully considered and focused on improving the industry’s service for customers.
"There is a need to address the failings of the primary market and we need to explore the risks of new and unregulated online resale channels."
StubHub responded similarly, saying it wants any regulatory changes to include a review of primary ticketers.
"We believe that the tools are in place today, through existing law, to protect consumers and address the potential issues highlighted by the CMA."
Ongoing complaints
The entertainment sector's closure during Covid-19 didn't end fans' complaints - campaigners wrote to the CMA 24 times in the first four months of lockdown.
The authority considered banning resale sites altogether but thinks that would only push sellers towards social media, creating a black market.
Even if secondary sales platforms comply with their obligations, a report from the CMA says they "are not required to fact check every detail provided by a seller at the outset", making efficient enforcement impossible.
The FanFair Alliance says it has continued sending "substantial evidence" to the CMA during the pandemic alleging behaviour including consumer protection law breaches and mass-scale fraud.
Viagogo in particular has a spotty history with compliance, Webb noted: "It is now even more imperative that these allegations are investigated comprehensively and, if required, decisive enforcement action taken."
Campaigning group Victims of Viagogo is also unimpressed with the CMA's suggestions. Critics wrote in a Facebook group that "Viagogo needs to be shut down and no one be left [out] of pocket".
"Their statement is a joke. Their customer service and the legality of their operation stinks," one complainant alleged.
But the CMA cannot itself order a trader to stop breaching consumer law, nor can it issue fines and sanctions.
"Even when the CMA wins in court, no civil fines are available," its report notes.
Multimillion-pound impact
Up to 75,000 active sellers representing 90% of the value of UK tickets could be affected by the proposals.
Secondary sites sold about £350m in tickets in 2019, investigation by the CMA found.
While the 200 largest resellers account for about half the value of secondary ticket sales, Viagogo and StubHub dominate the market. Their closest rival Gigsberg has less than a 5% share.
The CMA has found some success in tackling the lack of competition, rejecting a planned merger of StubHub and Viagogo in February.
But its work is expensive. Between December 2016 and March 2021, the CMA has spent £2.5m investigating resellers and enforcement via the authority or National Trading Standards cost £4.5m.
National Trading Standards estimates three criminal investigations into ticket resellers since 2017 - two convictions and one ongoing case - have cost at least £1.96m.
Now its funding for these specific investigations has expired, National Trading Standards says it won't start any new ones. Trading Standards Services within local authorities retain the ability to do so, however.
The CMA notes: "Even if no new enforcement work is launched in the sector, we estimate a further £600,000 of taxpayers’ money will be spent" before April 2022.